The Senate passed sweeping tax legislation last night. There is lots to digest in the bill, and there still is a reconciliation process to clear up differences between the House and Senate versions. As with the House legislation, there is not much procedure in the bill, though some of the substantive changes have major administrative implications.
While not the main focus, the Senate bill has some procedural provisions, which I highlight below:
- Changes the due diligence rules to include due diligence requirements associated with Head of Household filing status as well as CTC, EITC and AOTC;
- Extends time to return property subject to levy under Section 6343 from nine months to two years;
- Extends time to bring a wrongful levy suit under Section 6532 from nine months to two years;
- Caps user fees for installment agreements and explicitly waive fees for taxpayers at or under 250% of federal poverty guidelines;
- Defines proceeds under the whistleblower provisions to include interest and penalties under internal revenue laws and proceeds from laws IRS investigates, administers or enforces including criminal fines, civil forfeitures and violations of reporting requirements; and
- Modifies rules relating to property exempt from levy due to the elimination of the dependency exemption deduction and the increase in the standard deduction; the Senate bill provides that the amount that escapes levy is the sum of the standard deduction and $4,150 times the number of dependents in the taxpayer’s household. Given the increase in the standard deduction this amounts I believe to an additional amount of income that will be free of IRS levy; however absent submission of a verified statement the IRS is to treat a taxpayer as a MFS taxpayer with no dependents.
This is a moving target, and what comes out of the sausage factory is still up for grabs.
About Leslie Book
I should have realized Grassley would make sure it was more whistleblower-friendly than the IRS has been . That makes one good thing about the tax bill probably most academics support (though I don’t think it will outbalance what people think of pass-through!)
The issue of “collected proceeds” is currently being litigated in the D.C. Circuit in cases named Whistleblower 21276-13W and 21277-13W (D.C. Cir. Docket Nos. 17-1119 and 17-1120). On October 24, 2017, Senator Grassley filed an amicus brief there. That same day, an 11-member group calling itself “Former Federal Prosecutors and Tax Court Practitioners” also filed an amicus brief.
Whistleblowers? Those of us who don’t know the names and social security numbers of the criminals who embezzled our withholdings still get zilch.
Does it become legal to tell the truth on US tax returns? I doubt it. If we know that the Form W-2 we’re attaching was falsified by its issuer, IRB 2005-14 penalizes us if we alter the jurat; we have to declare that to the best of our knowledge and belief the form is true and correct.
But more importantly for 3% of US citizens, around nine million people, who had high hopes that the US would join the civilized world, it did not. Territorial taxation, roughly but not quite equivalent to residence based taxation, is coming for corporations but not for people. The US has only one remaining friend in the world that taxes its diaspora on the basis of citizenship, the US sponsored a UN resolution condemning Eritrea for that practice, and the US continues to pile on a ton of additional forms and reports that ordinary US citizens residing in the US never have to know about. Recent years’ record numbers of renunciations are going to be a drop in the bucket.
Prof. Book:
The version of the Tax Cuts and Jobs Act that you posted and reviewed was the one passed by the Senate Finance Committee and is now a dead letter.
Of interest to the previous commenters, the version passed by the entire Senate does NOT include the whistleblower provision about which Messrs. Ramussen, Smith and Diamond commented.
I think it is still in there. See sec 11074 at page 93 of the text. Of course we have to see what comes out of Conference and ultimately passed and presumably signed to see whether this becomes law
My apologies. I have now read the FULL Senate’s version of the TC&J, which I found today on Scribd, and see that your comment was correct.
My comment yesterday was mistakenly based on the Senate Budget Committee’s markup, which was also dated September 2.
Now: Tell us how you got hold of the Senate’s final TC&J version before it was published on Scribd.