Issue Number: 2018-40
Inside This Issue
- Tax Reform: Guidance on Business Expense Deductions
- New Look for IRS News Releases, Fact Sheets, Tax Tips
- Tax Reform: Limited Time to Elect Out of New 100 Percent Depreciation Deduction for 2017
- Relief for Typhoon, Hurricane Victims
- Technical Guidance
1. Tax Reform: Guidance on Business Expense Deductions
The IRS issued guidance this week on the business expense deduction for meals and entertainment following recent changes to the tax law. Individuals, or their employees, may continue to deduct 50 percent of the cost of business meals if present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact.
Until the proposed regulations are effective, taxpayers can rely on guidance in Notice 2018-76. Updates on the implementation of the Tax Cuts and Jobs Act can be found on the Tax Reform page of IRS.gov.
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2. New Look for IRS News Releases, Fact Sheets, Tax Tips
An updated format is coming for IRS news releases, fact sheets and tax tips. Beginning next week, redesigned mastheads will provide a new look and feel for IRS communications materials.
Based on recommendations from the Electronic Tax Administration Advisory Committee (ETAAC), Security Summit partners and tax professionals, the new designs more specifically call out special messages for groups interested in them.
For example, there is a new “Security Alert” masthead to warn taxpayers and tax professionals about emerging scams and threats. For disaster situations, there is a new “Disaster Relief” template designed to help highlight that information.
ETAAC and other groups recommended changes to more clearly call out these special categories of announcements and to help raise awareness on these issues for taxpayers and tax professionals.
This marks the first major changes in the IRS communications mastheads since the early 2000s.
The new mastheads will appear on copies of material shared by the IRS to the news media, tax professionals and other partner groups. The format for news releases and other communications materials posted on IRS.gov will not change, nor will the current numbering nomenclature (Ex: IR-2018-xx).
See samples of the new formats below.
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3. Tax Reform: Limited Time to Elect Out of New 100 Percent Depreciation Deduction for 2017
Businesses that placed qualifying property in service during 2017 but choose not to claim the new 100 percent depreciation deduction have a limited time to file the required election with the IRS. The new 100 percent deduction allows businesses to write off most depreciable business assets in the year they are placed in service. Because the deduction is retroactive and applies to qualifying property acquired and placed in service after Sept. 27, 2017, it may affect many 2017 tax returns.
For more information, see IRS Fact Sheet 2018-09.
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4. Relief for Typhoon, Hurricane Victims
Victims of Typhoon Mangkhut that struck in the Northern Mariana Islands on Sept. 10 and 11 may qualify for tax relief. The President has declared that a major disaster exists in the Commonwealth of the Northern Mariana Islands, which permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area.
Additionally, the IRS released an amended notice of disaster declaration allowing victims of Hurricane Florence who reside or have a business in Darlington and Florence counties in South Carolina to qualify for tax relief.
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5. Technical Guidance
Revenue Procedure 2018-52 modifies and supersedes Rev. Proc. 2016-51, 2016-42 I.R.B. 465, which sets forth the Employee Plans Compliance Resolution System ("EPCRS"), a comprehensive system of correction programs administered by the Employee Plans Division (TE/GE) for sponsors of retirement plans that have failed to satisfy certain requirements under sections 401(a), 403(a), 403(b), 408(k), or 408(p) of the Code.
Revenue Procedure 2018-53 provides procedures for taxpayers seeking private letter rulings regarding the satisfaction under section 361(b)(3) or (c)(3) or assumption under section 357 of debt of a distributing corporation pursuant to a transaction described by sections 355 and 368(a)(1)(D).
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