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Tax Reform 2.0 2018 Post-Filing Season Update Congress Approves Sweeping Tax Overhaul Tax Cuts and Jobs Act

Proposed Regs. Limit Charitable Contributions Made to Avoid SALT Deduction Limit
An individual, estate, and trust generally must reduce the amount of any charitable contribution deduction by the amount of any state and local tax (SALT) credit he or she receives or expects to the r...

Proposed Regulations Provide Guidance on GILTI Inclusion
Much-anticipated proposed regulations provide guidance for U.S. shareholders determining the amount of global intangible low-taxed income (GILTI) to include in gross income. The Tax Cuts and Jobs Act ...

Interim Guidance Provided for Exempt Organizations with Multiple Unrelated Businesses
Interim guidance and transition rules have been released regarding the special rule requiring exempt organizations that have unrelated business taxable income from operating more than one unrelated bu...

IRS Provides Guidance on What Constitutes a Covered Employee
Taxpayers can rely on new guidance related to the limitation on the deduction for employee compensation in excess of $1 million. Specifically, the guidance addresses:the definition of a covered employ...

Qualifying Relative Definition Still Uses Inflation Adjusted Exemption Amount
The IRS clarified who is a "qualifying relative" for the new $500 dependent credit and head of household filing status for tax years 2018-2025. The new rules will continue to use the inflati...

Moving Expense Reimbursements Incurred Before 2018 Are Excluded
Employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes.The Tax Cuts...

Six-Year Spread Applies to 481(a) Adjustments After Terminated S Corporation’s Accounting Method Change
New temporary rules clarify a six-year spread period for Code Sec. 481(a)adjustments after an eligible terminated S corporation changes from a cash to an accrual method of accounting. These rules...

North Carolina Victims of Hurricane Florence Granted Tax Relief
President Donald Trump has declared a federal disaster area in North Carolina. The disaster is due to Hurricane Florence, which began on September 7, 2018.The disaster area includes the following coun...

IRS Releases Guidance for Section 199A Pass-Through Deduction
The IRS has released long-awaited guidance on new Code Sec. 199A, commonly known as the "pass-through deduction" or the "qualified business income deduction." Taxpayers can re...

Regulations Issued on Partnership Representative Under Centralized Partnership Audit Regime
The IRS has issued final regulations regarding the designation and authority of the partnership representative under the centralized partnership audit regime. The final regulations make a number of ch...

Proposed Rules Address 100-Percent Depreciation Deduction
Proposed regulations address the new 100-percent depreciation deduction that allows businesses to write off most depreciable business assets in the year they are placed in service.BackgroundThe Tax Cu...

Regulations Proposed on Code Sec. 965 Transition Tax
Proposed regulations provide rules for determining the Code Sec. 965 inclusion amount of a U.S. shareholder of a foreign corporation with deferred foreign income. The tax imposed on the incl...

IRS Replaces Proposed Rules on Partnership Audit Regime
The IRS has released proposed regulations governing the centralized partnership audit regime. These regulations replace some existing proposed rules to reflect changes made by the Tax Technical Correc...

Short-Term Health Insurance Exemption from ACA Consumer Protections Broadened
The Departments of Health and Human Services, Labor, and Treasury have amended the definition of short-term, limited-duration individual health insurance coverage, by allowing such coverage to last up...

Hardest Hit Fund Safe Harbor Modified
The IRS has modified the safe harbor for computing deductible mortgage interest under Code Sec. 163 and real property taxes under Code Sec. 164(a)(1) by homeowners participating in...

IRS Extends Filing, Payment Deadlines for California Wildfire Victims
The IRS has extended filing and payment deadlines for certain California taxpayers affected by wildfires. Taxpayers in Shasta County may qualify for tax relief.Extended DeadlinesIndividuals and busine...

Discharge Relief Available for Private Student Loan Debtors
The IRS has provided relief to taxpayers who took out private student loans to finance attendance at a school owned by Corinthian College, Inc. (CCI) or American Career Institutes, Inc. (ACI). Under t...

Small Businesses Get Automatic Consent for Accounting Method Changes
The IRS will provide automatic consent to a small business taxpayer’s application to change to the cash method of accounting. Eligible small business taxpayers, as defined by the Tax Cuts and Jo...

Exempt Organizations May Not Need to Include Donor Information on Returns
Tax-exempt organizations, other than charities exempt under Code Sec. 501(c)(3), will soon be able to stop reporting the names and addresses of contributors on Schedule B when filing their inform...

IRS Unveils Draft Form 1040
Taxpayers will be able to file federal income taxes starting next filing season on a new postcard-sized Form 1040. The IRS officially released the draft 2018 Form 1040 on June 29.Draft Form 1040The ne...

Preparer Due Diligence Rules Include Head of Household Eligibility
The IRS has proposed amendments to the tax preparer due diligence regulations to reflect a recent law change. The Tax Cuts and Jobs Act ( P.L. 115-97) expanded the scope of the due diligence pena...

IRS Clarifies Estate and Trust Expenses Not Subject to Miscellaneous Itemized Deduction Suspension
The Treasury Department and the IRS plan to issue regulations clarifying that certain estate and nongrantor trust expenses remain deductible and are not subject to the miscellaneous itemized deduction...

Veterans Urged to Claim Refund for Tax Overpayments on Disability Severance Payments
The IRS has urged certain veterans who received disability severance payments after January 17, 1991, and included that payment as income that they should file Form 1040X, Amended U.S. Individual Inco...

IRS Highlights “Security Six” Safeguards
The IRS, along with Security Summit partners, offered important tips dubbed "Security Six"protections to help tax professionals protect their computers and email as well as safeguard sensitive ta...

AZ - Guidance on “offer-in-compromise” updated
For corporate and personal income tax purposes, the Arizona Department of Revenue issued a booklet providing guidance on "offer-in-compromise." The guidance discusses the requirements for su...

CA - California enacts requirements for federal partnership audit adjustments
California has enacted assessment and reporting requirements for adjustments under the federal partnership audit rules. The requirements apply to final federal determinations assessed under the rules ...

CO - Guidance on Colorado capital gain subtraction updates
The Colorado Department of Revenue has updated its guidance regarding the corporate and personal income tax subtraction allowed for certain qualified capital gain income if it is included in federal t...

FL - Local communications services tax rate change announced
Effective January 1, 2019, a local communications services tax rate will change in Florida. The following jurisdiction will have a decrease in rate due to a local ordinance: Marco Island (Collier Coun...

GA - Georgia tax collection for certain remote sellers begins January 1
Georgia issued guidance on remote seller’s sales tax obligations beginning January 1, 2019.What Must Remote Sellers do?Beginning January 1, 2019 remote sellers who met certain thresholds must ei...

HI - Renewable energy technologies income tax credit discussed
The Hawaii Department of Taxation (department) issued a letter ruling discussing when a taxpayer’s commercial solar energy system was considered installed and placed in service for the purposes ...

ID - 2019 circuit breaker program addressed
The annual property tax reduction (or "circuit breaker") program available to qualified homeowners (including mobile homeowners and residents of a care facility or nursing home) who both own and ...

IL - Tax benefits on back-to-school expenses discussed
Illinois personal taxpayers may claim an education expense credit for school expenses for their K-12 student on their 2018 returns. The credit allows parents or guardians of a full-time student under ...

IA - DOR offers wayfair guidance
Iowa issued guidance regarding how the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., Docket No. 17-494 affects Iowa and online retailers, remote sellers, and marketplace p...

MD - Economic nexus thresholds set
Maryland sales and use tax economic nexus thresholds apply on October 1, 2018. The emergency rule with the thresholds expires March 30, 2019.Economic Nexus ThresholdsA remote seller has economic nexus...

MA - Merrimack valley explosions extension available
Taxpayers affected by the gas explosions have been granted filing and payment extensions for Massachusetts state tax purposes.Payment and Filing Extension Dates and AreasThe Massachusetts Department o...

NV - Regulations adopted on credit for new or expanding businesses
Nevada adopted regulations on the transferable credit available to new or expanding businesses. Taxpayers can apply the credit against:the modified business tax;the financial institution modified busi...

NM - Qualifications for small businesses and individuals expanded for managed-audit program
For corporate and personal income tax purposes, the New Mexico Taxation and Revenue Department (department) has expanded the qualifications for small businesses and individuals for the managed-audit p...

NY - Assessments upheld for failure to prove change of domicile
A taxpayer was liable for New York personal income tax because he failed to prove that he had abandoned his domicile for the tax years at issue. In this matter, the taxpayer was assessed additional ta...

NC - DOR announces additional county eligible for hurricane florence tax relief
The North Carolina Department of Revenue advises taxpayers that 10 additional counties have been designated a "Disaster Counties"eligible for state tax relief as a result of Hurricane Florence. T...

ND - Guidance issued on repatriation income, GILTI, and FDII
The starting point for computing North Dakota taxable income includes IRC §965 repatriation income and the IRC §965 deduction. But taxpayers must add the IRC §965 deduction back to Nort...

OH - Taxpayers filing 2019 municipal net profit tax must register by October 1
The Ohio Department of Taxation (department) has issued a press release informing corporate income taxpayers that Ohio businesses that have a tax year that begins on August 1, 2018 and want to file th...

OR - Taxpayer established good and sufficient cause for filing exemption late
An Oregon taxpayer was entitled to a property tax exemption because it demonstrated good and sufficient cause for failing to file a timely claim. The taxpayer appealed the county assessor's denial of ...

PA - Taxability of sale of Malt or brewed beverages by manufacturers discussed
The Pennsylvania Department of Revenue has issued a bulletin discussing the applicability of sales and use tax to the sale of malt or brewed beverages by manufacturers. The bulletin, effective January...

TN - Taxability of free samples offered by distilleries discussed
The Tennessee Department of Revenue has issued a notice discussing the applicability of sales and use tax to free samples offered by distilleries. Distilleries must pay sales or use tax on free sample...

TX - Protest denied for taxpayer’s failure to provide valid exemption certificates
A taxpayer’s claim for an exemption from Texas sales and use tax on its sales of medical supplies was properly rejected because the taxpayer failed to provide valid exemption certificates. Under...

UT - Assessments revised because husband was not full-year resident
For Utah personal income tax purposes, an assessment against a married couple (taxpayers) was revised for 2013 and 2014 tax years because the taxpayers established that the husband was not a Utah full...

VA - Interest rate unchanged for fourth quarter of 2018
The Virginia interest rates for the fourth quarter of 2018 will remain at 7% for bothtax underpayments (assessments), andtax overpayments (refunds).Rate for Underpayments of Estimated Tax AdditionFor ...

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