With the Tax Cuts and Jobs Act (TCJA) being such a comprehensive bill, there is often some uncertainty over various provisions and how they are to be interpreted. While the IRS has offered some guidance over the past year, one resource that tax practitioners often look forward to is a report issued by the Staff of the Joint Committee on Taxation (JCT). This group is the team of attorneys, accountants, economists, and more that works with Congressional leaders in drafting tax legislation and estimating the effects of the proposed changes. The JCT Staff issued on December 20, 2018 its “General Explanation of Public Law 115-97” (Tax Cuts and Job Act – TCJA), which was almost one year ago to the day of when the tax bill was signed into law. This report is often titled the “Blue Book” (as the paper copy of this report by the government printing office comes out on light blue paper). The Blue Book addresses various provisions in last year’s tax bill and presents Congress’ intent on all the items in the bill as they were drafted. It is used by taxpayers, tax practitioners, the IRS, and others in understanding and interpreting the bill. This is a useful reference tool (please click here to view this JCT report).
There is much to digest in the Blue Book. It runs over 450 pages, and there are nearly two thousand footnotes. There are often some useful explanations and guidance found in these footnotes, so it is important to read these closely. In reviewing portions of the Blue Book, there were several items in which the discussion offered in the Blue Book differed from the guidance the IRS had already provided on the matter. For instance, here are four illustrations where the Blue Book runs counter to what the IRS had provided in other guidance issued during this past year:
There are likely many other differences spelled out in the Blue Book from other guidance and explanations offered this year by the IRS. It will be interesting to see what changes the IRS may make in these cases. We will continue to provide the latest tax developments on the TCJA, including any Blue Book updates. Please contact your Sikich tax advisor with questions you may have.
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