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Republican Tax Bill Passes Senate

Posted on Dec. 2, 2017

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.

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