Tax News: March ’18
Open and shut. The IRS was able to start accepting 2017 tax returns as scheduled on Jan. 29, 2018, after the government shutdown on Jan. 20 lasted only two days. But what happens if the feds shut down again? If this occurs during tax filing season, it could delay refunds. In addition, other vital IRS functions would be put on hold, including processing returns, conducting audits and offering taxpayer assistance such as answering telephone calls.
A site for sore eyes. Does the IRS website, www.irs.gov, look any different to you? Your eyes aren’t deceiving you. Late last year, the IRS updated the site to make it more user friendly, especially for taxpayers on the go. Notably, content has been structured to meet mobile user needs on a smartphone or tablet. Eventually, the site will also have the metadata structure needed to support smart technology.
SALT-free diet. The new $10,000 limit on state and local tax (SALT) deductions is being contested in some states with high income and property taxes. New York is considering replacing its state income tax with a payroll tax, while legislators in Connecticut, New Jersey and Washington, D.C., are eyeing other options. What’s more, the limit could be challenged on constitutional grounds. We will keep a watch for new developments.
The color purple. The National Taxpayer Advocate (NTA) is required to annually update Congress on the state of affairs at the IRS. This year, NTA Nina E. Olson went even further. In addition to the usual data, the NTA unveiled its inaugural “Purple Book” outlining 50 legislative recommendations for strengthening taxpayer rights and improving tax administration. (IR-2018-03, 1/10/18) Many of these Purple Book proposals have been detailed in prior reports, but others were presented for the first time. Among the new recommendations, Olson has proposed that Congress codify both the Taxpayer Bill of Rights and the IRS mission statement as Section 1 of the Internal Revenue Code. Finally, this year’s NTA report identifies 21 “serious” problems at the IRS and suggests ways to fix them.
Another tax resurrection. After the mammoth Tax Cuts and Jobs Act (TCJA) was pushed through Congress and signed by the president, you’d think the nation’s lawmakers would take a break from tax legislation. Not so. On Dec. 21, 2017, Senate Finance Committee Chairman Orrin Hatch (R-Utah) introduced a new bill extending several popular tax measures that have expired. The list of tax breaks Hatch proposes to resurrect include the college tuition deduction, the exclusion for forgiven home mortgage debt, the private mortgage insurance deduction, the tax credit for certain energy-efficient home improvements and favorable depreciation schedules for owners of racehorses and motorsports facilities (the so-called NASCAR tax break). We will keep you posted on this latest extenders bill.
