Since the passage of the Tax Cuts and Jobs Act, the meetings of the American Bar Association Section of Taxation have produced comments from officials with the Treasury and the IRS that have given hints to the shape of future guidance to be issued on the law.  The October meeting in Atlanta has produced new information about the application of the provisions of §199A.

The proposed regulations issued earlier this year provided for a de minimis rule where the performance of what would be in the category of a specified service trade or business would not cause the underlying business to be treated as such if the gross receipts were below specific floors.  For a business with gross receipts of $25 million or less, the floor is set at 10% or less of gross receipts.  For businesses with gross receipts above $25 million, the floor drops to 5% or less of gross receipts.

Image copyright Ionut Catalin Parvu/123rf.com

In Information Letter INFO 2018-0024 the IRS responded to an individual who wished to take a distribution from a §457 retirement plan to help with repairs that were made necessary due to damages caused by Hurricane Irma in 2017.

Image copyright Nattachart Jerdnapapunt/123rf.com

The IRS announced in Notice 2018-76 transitional guidance on the treatment of business meals following the revisions made to IRC §274 by the Tax Cuts and Jobs Act.

Image copyright maximkabb/123rf.com

Guidance has been issued by the IRS for employers looking to claim a credit under IRC §45S for paid family and medical leave in Notice 2018-71.  This provision was added to the law for two years as part of the Tax Cuts and Jobs Act (TCJA) enacted in late 2017.

Under the Family and Medical Leave Act of 1993 (FMLA) an employee is required to grant covered employees up to 12 weeks of leave for certain medical issues arises related to their health or that of certain related persons.  However, an employer is not required to pay employees while on such leave.  Rather, FMLA was meant to assure the employee had a job to return after coming back from such leave.

Image copyright tele52/123rf.com

Employer reimbursement of an employee’s moving expenses are no longer excludable from income under the Tax Cuts and Jobs Act.  But the law was not totally clear on whether the exclusion would apply for reimbursements paid in 2018 for moves conducted in 2017.  In Notice 2018-75 the IRS clarified that reimbursements made by an employer in 2018 for amounts paid in 2017 would continue to be excludable under the pre-TCJA rules.

Image copyright Maksym Yemelyanov/123rf.com

In the case of Belair Woods LLC v. Commissioner, TC Memo 2018-159, the Tax Court found that a taxpayer had neither fully nor constructively complied with the documentation requirements for a charitable contribution.  The Court held that this action constituted a failure in compliance despite the taxpayer having received advice from a consultant that an attorney had indicated that providing basis in the case of a contribution was not truly required.  

However, the Court determined that even though the taxpayer’s position was clearly wrong, there was still a possibility the taxpayer might be able to show it had reasonable cause for its failure that could preserve the deduction.  However, whether it had such cause or not must be determined in a later proceeding, since several material facts remained to be shown by the taxpayer to justify its reliance on the information relayed from the attorney.

Image copyright icetray / 123RF Stock Photo

The IRS announced a delay in making major revisions in the Form W-4, announcing in a Treasury Department Press Release that the revised form will be released for 2020, not 2019.

Image copyright grazvydas/123rf.com

The IRS has announced relief from filing deadlines for taxpayers impacted by Hurricane Florence in News Release NC-2018-03.

Image copyright larryrains / 123RF Stock Photo

The state of Colorado has issued emergency rules (Regulation 39-26-102 (1.3); Regulation 39-26-102 (9)) that would impose requirement on out of state sellers to collect Colorado.  The collection would be required effective on November 30, 2018.

Image copyright 123rf.com/esadaphorn Chaiinkeaw 

The key factor to sustaining a taxpayer’s claim to be a real estate professional in cases before the Tax Court generally comes down to whether the taxpayer has sufficient and reliable records to back up their activity.  In the case of Birdsong v. Commissioner, TC Memo 2018-148 the taxpayer’s records were found to be sufficient to sustain her contention that she was a real estate professional.

Image copyright 123rf.com/lkeskinen

In a Project Manager Technical Advice addressed to the IRS Taxpayer Advocate and the Commissioner of the Wage and Investment Division, the Chief Counsel’s office concluded that the IRS can use the math authority to correct errors in the earned income tax credit, child tax credit, additional child tax credit and the American opportunity tax credit even if the return has already been processed and a refund issued (PMTA 2018-017).

Image copyright www.123rf.com/profile_usamedeniz

In what can be called an “interesting” news release (IR-2018-178), the IRS clarified that the proposed regulations that dealt with a required reduction of charitable contributions for state tax credits will not impact deductions claimed for business related payments to charities.

Image copyright 123rf.com/damedeeso