Proposal Comments:

• Regulations Governing Practice Before the IRS

   

  February 17, 2025

  TXCPA’s Federal Tax Policy Committee issued comments on proposed rulemaking regarding regulations governing practice before the IRS (REG-11610-20). While the committee supports Treasury’s efforts to balance effective taxpayer representation with enforcement, it has concerns regarding certain provisions, including the proposal that the practitioner is required to ensure corrective actions are taken on an incorrect tax return and the broad restrictions on contingent fees. The committee urges Treasury to provide necessary clarifications and modifications to ensure taxpayer rights and access to competent representation remain protected.

  Read the full comment letter

   

   

   

• TXCPA Committee Suggests Reducing the Administrative Burden of K-2 and K-3 Filings

   

  February 5, 2025

  TXCPA’s Federal Tax Policy Committee issued a letter to the IRS on concerns with burdensome compliance requirements. The committee supports the IRS’s efforts to identify activity with high compliance risk and to make certain partners with international tax issues provide information needed to prepare accurate tax returns.

  However, the current requirements for Schedules K-2 and K-3 have not set the right balance between enforcement and administrative burden. The committee offered recommendations to assist the IRS in reducing the taxpayer burden associated with filing Schedules K-2 and K-3 without reducing the ability to identify returns with foreign activity tax compliance risk.

  Read the full comment letter

   

   

   

• IRS Proposal - Advance Notice of Third-Party Contacts

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  September 3, 2024 - TXCPA’s Federal Tax Policy Committee issued a comments letter to the IRS on rulemaking that seeks to limit taxpayer rights.

  The proposed regulations REG-117542-22 would give the IRS discretion to reduce a congressionally-mandated 45-day notice to 10 days to taxpayers before contacting a third party – friends, colleagues, employers, vendors – with respect to the determination of tax collection.

  Imminent statute situations often occur because of decisions made by the IRS regarding resources or in some cases due to lack of diligence by IRS employees. The committee feels strongly that the 45-day notification period should be respected unless there is some compelling reason to disregard it. Taxpayers should not be disadvantaged by possible IRS delays.

• Request to FinCEN to Delay BOI Filing Deadline

  TXCPA Committee Calls on FinCEN to Delay BOI Filing Deadline for All Entities by One Year

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   The TXCPA Federal Tax Policy Committee, chaired by David Colmenero, J.D., LL.M., CPA-Dallas, responded yesterday to the FinCEN Notice of Proposed Rulemaking regarding the Beneficial Ownership Information (BOI) reporting that is scheduled to begin Jan. 1, 2024. FinCEN’s proposal temporarily extends from 30 days to 90 days the filing deadline for certain reporting companies to file initial BOI reports.

   TXCPA’s Federal Tax Policy Committee suggests that the filing deadline for all existing entities be delayed one year until 2025, the 90-day deadline for new entities be made permanent and the period for reporting subsequent events be extended to at least 90 days, as well.

   The BOI reporting, which is currently scheduled to begin Jan. 1, 2024, will require an estimated 32 million existing small businesses to disclose their beneficial owners to FinCEN, with five to six million new business entities required to disclose annually going forward.

• IRS Regulations - Required Minimum Distributions from Inherited IRAs

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  TXCPA’s Federal Tax Policy Committee asked Senate Finance and House Ways and Means leadership to clarify legislative intent to the IRS on the SECURE Act provision requiring certain IRAs to be fully distributed by the end of the 10th year following the account owner’s death. The committee feels strongly that the IRS has overstepped its authority by requiring annual distributions, an interpretation that is detrimental to taxpayers. Additionally, given the lack of guidance, taxpayers who follow the statutory language and fully distribute inherited IRAs by the end of the 10th year should not be penalized until this matter is resolved. 

• Section 174 R&E Amortization Requirement
  Read Comment Letter.
• Inherited IRAs - Required Minimum Distributions

   

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• IRS Form 3520 and Form 3520-A

   

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• Exposure Draft – Revised Statements on Standards for Tax Services and Invitation to Comment

   

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• Enhancing Video Conference Options for Taxpayers and Tax Professionals

   

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• Use of Scanning Tech Recommended
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• A Balanced Approach to IRS Funding Between Taxpayer Services, Technology, Training and Compliance
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• Additional Relief Sought on Schedules K-2 and K-3 Requirements
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• Third-Party Authentication to Access Certain IRS Online Resources (facial recognition)

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• Changes to Simplify and Improve the AAR Process Under the Centralized Partnership Audit Regime and Proposed “AAR-EZ” Process Framework
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