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The House has approved two tax bills that are part of Republicans’ three-pronged "Tax Reform 2.0" package. The two measures, approved by the House on September 27, focus on retirement savings and business innovation.


The House has approved a tax bill that would make permanent tax reform’s individual and small business tax cuts enacted last December. The controversial bill is part of Republican’s three-bill "Tax Reform 2.0" package, two of which cleared the House on September 27 (see the previous story in this Issue).


Stakeholders are urging the IRS to clarify its guidance on tax reform’s new passthrough deduction. The IRS held an October 16 public hearing on proposed rules for the new Code Sec. 199Apassthrough deduction at its headquarters in Washington D.C. The IRS released the proposed regulations, REG-107892-18, on August 8.


Top Senate tax writers have introduced a bipartisan bill to prevent duplicative taxation on digital goods and services. The bill aims to establish a framework across multiple jurisdictions for taxation of digital goods and services, including electronic music, literature, and mobile apps, among other things.


The IRS has released Draft Instructions for the 2018 Form 1040. Additionally, the IRS has cautioned taxpayers that the draft instructions are subject to change. The IRS released a draft of the 2018 Form 1040 and six accompanying schedules last June.


The IRS’s new Commissioner was officially sworn in on October 1 by Treasury Secretary Steven Mnuchin. IRS Commissioner Charles "Chuck" P. Rettig will lead the implementation of tax reform enacted last December under the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97).


The Senate Small Business Committee held an October 3 hearing on expanding opportunities for small businesses through the tax code. Senate lawmakers examined tax reform’s effect on small businesses and discussed witnesses’ proposals to address ambiguity in the new tax code.


As 2015 winds down, another temporary extension of the tax extenders appears almost certain. Despite talk in early 2015 about finding a permanent solution to the on-again, off-again extenders, the arrival of November brings a short window for Congress to extend these tax breaks. The expected late passage of these popular tax breaks also adds uncertainty to year-end tax planning as well as possibly causing a delay to the start of the 2016 filing season.


After acknowledging earlier this year that hackers breached one of its popular online apps, the IRS has promised more identity theft protections in the 2016 filing season. The IRS, along with partners in the tax preparation community, has identified and tested more than 20 new data elements on returns to help detect and prevent identity-theft related filings. The agency is also working to prevent criminals from accessing tax-time financial products.


As the calendar approaches the end of 2015, it is helpful to think about ways to shift income and deductions into the following year. For example, spikes in income from selling investments or other property may push a taxpayer into a higher income tax bracket for 2015, including a top bracket of 39.6 percent for ordinary income and short-term capital gains, and a top bracket of 20 percent for dividends and long-term capital gains. Adjusted gross incomes that exceed the threshold for the net investment income (NII) tax can also trigger increased tax liability. Accordingly, traditional year-end techniques to defer income or to accelerate deductions can be useful.


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