Treasury and IRS Propose Rules Regarding Section 199A Deduction: Treasury and the IRS issued a notice of proposed rulemaking containing proposed regulations concerning the deduction for qualified business income under section 199A, enacted by P. L. 115-97. The proposed regulations are intended to provide taxpayers with computational, definitional, and anti-avoidance guidance regarding the application of section 199A.
Treasury and the IRS also issued Notice 2018-64, which provides a proposed revenue procedure providing methods for calculating W-2 wages (1) for purposes of section 199A(b)(2), which, for certain taxpayers, provides a limitation based on W-2 wages to the amount of the deduction for qualified business income under section 199A(a); and (2) for purposes of section 199A(b)(7), which, for certain specified agricultural and horticultural cooperative patrons, provides a reduction to the section 199A(a) deduction based on W-2 wages.
We will provide a more-detailed summary of the regulations.
Tax Court Holds Withholding Liability Should Be Addressed in Partnership-Level Proceeding: In YA Global Investments, LP v. Comm’r, 151 T.C. No. 2, the Tax Court held that a liability stemming from duty to withhold under section 1446 is a partnership liability and therefore properly before the Court in a partnership-level proceeding, as are penalties relating to the partnership-item adjustment.