Treasury Eyes Summer Release for Tax Guidance ‘Balancing Act’

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By Alison Bennett and Laura Davison

The Treasury Department and the IRS are aiming to release the projects recently added to their 2017-2018 Priority Guidance Plan before July.

The Internal Revenue Service released an addendum to the annual plan on Feb. 7, which contained 29 regulatory projects to implement the 2017 tax act. The government seeks to release guidance in all of those areas by June 30, the IRS’s business year end, said Bryan Rimmke, an attorney-adviser in the Treasury’s Office of Tax Legislative Counsel.

Among the new projects are rules implementing a deduction for pass-throughs under tax code Section 199A, guidance curbing the interest expense deduction, and rules to prevent multinationals from moving intangible assets offshore. The plan doesn’t include some other areas, such as the new restrictions on carried interest, because the IRS had to be selective about which projects to complete first, Rimmke said Feb. 9 at the American Bar Association Section of Taxation meeting in San Diego.

“Just because something did not get on that list doesn’t mean we’re not thinking about it,” he said.

Treasury officials predict that a complex guidance process will be needed to implement the tangle of international tax provisions enacted as part of tax reform.

“It’s a balancing act,” Brenda Zent, special adviser in the Treasury Office of International Tax Counsel, said Feb. 9. “It’s not one-size-fits-all.”

Zent said that for some issues, the government may write proposed rules that taxpayers would be allowed to apply going back to Dec. 22, the date the statute was enacted, but didn’t specify the areas where Treasury might take that approach.

Too Complex for ‘Triage’

“Treasury is committed to balancing the need to provide prompt guidance with well-thought-out guidance,” Zent said, and is working “very intensely” with the IRS and with Capitol Hill “where needed.”

She said two controversial provisions in the 2017 tax act ( Pub. L. No. 115-97), dealing with the base erosion and anti-abuse tax and global intangible low-tax income “just weren’t what we considered triage.”

Jason Yen, an attorney-adviser in Treasury’s international tax counsel’s office, said the department has set up individual groups to work with the IRS on international issues, and “we should expect that there will be different waves of guidance.”

The priority is “taking reasonable positions consistently,” Zent said, adding that when Treasury tries to provide immediate guidance through notices, the department has to consider whether it might slow down more comprehensive guidance that is needed.

“We’re just taking one step at a time and we’re going to get there,” she said.

To contact the reporters on this story: Alison Bennett in San Diego at abennett@bloombergtax.com; Laura Davison in San Diego at ldavison@bloombergtax.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bloombergtax.com

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