IRS Likely to Push Some Priority Projects Into 2019

Payroll on Bloomberg Tax is built to get you to the right answer faster and more efficiently. Get all the payroll intelligence you need with Bloomberg Tax expert analysis, perspectives and...

By Jazlyn Williams

An update to the IRS’s fiscal 2018 priority plan included payroll topics that need additional guidance under the tax code overhaul, but many of the projects would likely be pushed into the fiscal 2019 list of projects, the Treasury Department said.

The third-quarter update, released May 9, included issues such as the tax credit for employers offering family and medical leave, employer-provided meals, and an extension of filing dates under the Affordable Care Act. Additional guidance was expected for the 2019 Form W-4, Employee Withholding Allowance Certificate, a draft of which was released June 6. A draft of instructions was released June 7.

The quarterly update to the fiscal 2018 plan “reflects 13 additional projects as well as guidance we published (or released) during the period from October 13, 2017, through March 31, 2018,” the Treasury said in an introduction to the update.

Recent efforts have prioritized projects implementing the tax code overhaul, the Treasury said in its request for recommendations for the fiscal 2019 priority guidance plan ( Notice 2018-43). The focus on the new tax law (Pub. L. 115-97) meant that many of the projects on the fiscal 2018 plan, which covers the period from July 1, 2017, to June 30, 2018, would not be completed by the end of the 12-month period and likely would be carried over to the fiscal 2019 plan.

The American Payroll Association, in a June 15 letter responding to the request for recommendations, said expanding electronic filing and payment systems should be on the agency’s list of projects to undertake in fiscal 2019, which covers the period from July 1, 2018, to June 30, 2019.

Recommendations from the association of payroll professionals included:

  •  Creating a free electronic-filing service that would accommodate smaller employers unable to use third-party assistance to file Forms 1099-MISC, Statement for Recipients of Miscellaneous Income, through the Filing Information Returns Electronically system.
  •  Implementing an electronic levy system for receiving federal tax levies and submitting payments for amounts withheld from employee wages. The system could operate similarly to the one used by the Office of Child Support Enforcement, which allows employers to transfer funds electronically.
  •  Allowing employers to electronically file amendments to the Form 94x series (940, 941, 943, 944, and 945) and related forms. Forms W-2c, Corrected Wage and Tax Statement, may be filed electronically, but the corresponding corrections to the employer’s tax returns may not. This “creates an unnecessary administrative and cost burden for payroll departments,” the association said.
• Guidance on employer-provided meals, tipped workers, and the truncation of Social Security numbers on Forms W-2, Wage and Tax Statement, also was needed, the association said. The association recommended that the IRS and Treasury Department “work more closely with stakeholders on outreach and guidance language well before the agencies have finalized information.”

Although recommendations for the fiscal 2019 plan were due June 15, 2018, comments may be submitted at any time during the year to be considered for updates to the plan, the Treasury said.

To contact the reporter on this story: Jazlyn Williams in Washington at jwilliams@bloombergtax.com. To contact the editor responsible for this story: Michael Baer at mbaer@bloombergtax.com.

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Payroll