Areas of new tax law requiring IRS and Treasury guidance

There are 39 areas of the Tax Cuts and Jobs Act about which taxpayers and tax practitioners need immediate guidance, the American Institute of CPAs (AICPA) stated in a January 29 letter to the Internal Revenue Service (IRS) and U.S. Department of the Treasury.  AICPA members played an instrumental part in identifying those areas.

“We have highlighted some of the specific areas that need immediate guidance in order for taxpayers and practitioners to comply with their 2017 tax obligations and make informed decisions with regards to cash-flow, entity structure, retirement, wealth transfer and a vast number of other tax planning issues,” Annette Nellen, chair of the AICPA Tax Executive, wrote.

Nellen identified three particular areas of concern:

• Section 199A – Guidance is needed on the definition of a specified service trade or business, the interaction of this section with other Internal Revenue Code sections and the calculation of the section 199A deduction for complex business structures.
• Section 481 – General procedural guidance is needed for making accounting method changes in order to comply with the new rules.
• Penalty relief for underpayment of taxes – Taxpayers and tax preparers need sufficient time to determine the appropriate withholding and estimated tax payments for businesses, individuals, trusts, estates and other entities that may have a dramatically different tax liability in 2018 or that are impacted by provisions effective for 2017.

The AICPA letter listed the areas of requested guidance in numerical Internal Revenue Code section order, with a reference to the corresponding section in the new law.