The IRS expects to issue guidance on the Internal Revenue Code (IRC) Section 199A passthrough deduction in July, Acting IRS Commissioner David Kautter has said.
More specifically, the proposed guidance on the passthrough deduction is expected to be released by the end of July. “The goal of the guidance is to get things out that are complete,” the IRS spokesperson said. “But, it will not cover every question that taxpayers have,” the spokesperson added.
The new passthrough deduction was enacted under the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97) last December. The new law provides a 20% deduction for income from passthrough entities. The deduction is limited by certain controversial factors, including business activities, wages paid by the business, and property values.
Generally, Kautter anticipates initial follow-up questions from taxpayers and practitioners after the proposed guidance is released. Kautter has said that it would be better to get the guidance out in “fairly good shape,” to allow for public comment and input, rather than taking more time to draft the guidance internally, according to several reports. Kautter has reportedly said that not everyone may agree with that approach, but that a “better product” will likely be created because of it.
For more information about this article, please contact our tax professionals at email@example.com or toll free at 844.4WINDES (844.494.6337).