If it looks like a duck and quacks like a duck, it’s a tax bill

Nope, not a non sequitur. Congress is heading into a lame-duck session with several tax bills on its agenda. Congress must also pass an omnibus spending bill—and some tax provisions may get wrapped up into that. Republicans are ending a four-year run of having complete control of Congress.

When the 116th Congress begins in January, with Democrats in the majority in the House of Representatives, priorities will change.

Here’s what you can anticipate between now and the end of December.

TCJA technical corrections

Every major tax bill goes through a correction process and the Tax Cuts and Jobs Act is no exception. While a technical corrections bill is being floated, it won’t include changes to the $10,000 state and local taxes (SALT) cap or the 21% excise tax nonprofits must now pay on parking benefits. Remember, those provisions were features of the tax law, not drafting errors.

FLSA Compliance D

IRS reform

The last time the IRS was “reformed” was in the late 1990s. One can question whether splitting up the agency into four divisions—Large Business, Small Business and Self-Employed, Wage and Investment and Tax Exempt and Government Entities—was a good idea, but it has functioned reasonably well for about 20 years now. The Small Business and Self-Employed division deals with payroll issues.

There are three IRS reform bills. These bills have bipartisan support and are reasonably farther down the legislative pipeline than other bills.

  • B. 3246, Taxpayer First Act of 2018: The bill would provide more assistance to individual taxpayers, prohibit the IRS from rehiring employees who were fired for misconduct and require the IRS to take additional steps to safeguard against identity theft and stolen identity refund fraud.
  • B. 3278, Protecting Taxpayers Act: This bill is more payroll-oriented than the other two. It would require the IRS to send taxpayers quarterly instead of annual notices of delinquencies, set up a safe harbor for employer tip reporting and require the release of federal levies that cause hardships for employers.
  • R. 5445, 21st Century IRS Act: The bill would establish cybersecurity requirements for the IRS and would also require it to establish a platform for e-filing Forms 1099.

2019 priority guidance plan

If Congress can’t get the job done, can the IRS? Well, maybe.

The IRS has finally released its 2018/2019 priority guidance plan. Many TCJA items are on it, including guidance on tax-free meals provided to employees under IRC § 119 (convenience meals) and § 132 (meals provided in company cafeterias) and qualified equity grants. Thankfully, clarifying the 21% excise tax nonprofits must now pay on parking benefits is also included in the plan.