With so many new rules and regulations, it’s vital for tax CPAs to stay current on tax reform. However, information has been slow in coming. The IRS continues to issue news releases, notices, instructions and other forms of informal guidance on the most pressing items, but the AICPA Tax Policy & Advocacy team is advocating for additional guidance and legislative changes on the topics most important to the profession.
These include changes to the new QBI deduction, which raise questions regarding cash flow, entity structure and other tax planning issues. The AICPA has requested guidance on six specific items affecting QBI.
Their position is that Treasury and the IRS should permit pass-through businesses to calculate QBI based on the activity level rather than the entity level, which would allow a business to segregate its non-qualified trade or business from its qualified business to calculate the deduction. Allowing the separation and aggregation of different functions of the business will benefit CPAs.
The question of client-related meals also remains unclear. The AICPA submitted a comment letter to Treasury and the IRS that requests guidance on Sec. 274, the disallowance of entertainment, certain business-related meals, and qualified transportation fringe benefit expenses.
The AICPA also has identified some technical corrections needed to “fix” the new tax law so it operates as intended. Learn the details of these and other TCJA items on which the AICPA is requesting guidance.