November 2017

New Emissions Reporting Requirements for Animal Farms Delayed until January

On April 11, 2017, the United States Court of Appeals for the District of Columbia vacated an EPA final rule that had been in place for nine years. The rule—called the CERCLA/EPCRA Administrative Reporting Exemption for Air Releases of Hazardous Substances from Animal Waste at Farms—exempted most farms from CERCLA and EPCRA reporting requirements for air releases from animal waste. The court ruled that the EPA had exceeded its statutory authority in granting the exemptions.

The court’s order subjected approximately 44,000 new commercial animal farms to reporting requirements the EPA has characterized as costly and burdensome.

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IRS Notice Expands Penalty Relief for Partnerships

On November 30, 2017, IRS issued a notice expanding earlier guidance it had issued offering penalty relief to partnerships for certain late filed returns. In Notice 2017-71, IRS stated that any act (except those pertaining to interest) performed for the 2016 taxable year of a partnership, REMIC, or certain other entities will be treated as timely for all purposes under the Internal Revenue Code, as long as the act would have been timely if the Surface Transportation Act had not changed the due date for partnership returns. This Notice expands and supersedes the relief provided in Notice 2017-47.

For example, the Notice reiterates that if a calendar year partnership filed a Form 1065 in 2017 that would have been timely filed under the old deadline (April 18), with extensions, the partnership will not be subject to penalties, even if the Form was filed after the new deadline (March 15) imposed by the Surface Transportation Act. The Notice also clarifies that the same relief applies to other actions, such as making elections, contributing to an employee pension plan, or paying tax, by the due date of its return, either with or without regard to any extension of time to file, depending upon the particular action. Although the penalty would be abated, the Notice makes clear that entities would still be liable for any interest due if 2016 tax was paid after the new due date.

We delayed sending our November newsletter (which would typically be sent the last day of the month), until after the Senate vote so that we could provide you with the most up-to-date information on tax reform.

Senate Passes Landmark Tax Reform Legislation

In the early hours of this morning (December 2), the Senate passed landmark tax legislation which, if enacted into law, will impact every individual and business in America. The vote on H.R.1, the Tax Reconciliation Act, was strictly along party lines, 51-49. One Republican, Sen. Bob Corker of Tennessee, voted against passage of the bill.

Up to the time of the final vote, amendments were considered and voted upon. It will take some time to sort out the impact of all of the provisions, but what follows is an overview of the Senate bill that passed this morning, as well as a comparison to the House bill that passed on November 16. When the official version of the modified Senate bill is posted, we will provide a link. The Joint Committee on Taxation issued its economic analysis of the final changes this morning.

Modifying the Individual Tax Brackets

The Senate bill would retain seven tax brackets for individuals, but would lower the rates to 10%, 12%, 22%, 24%, 32%, 35%, and 38.5%. The top bracket would not be reached for married taxpayers until they have income above $1 million.

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QSEHRA Guidance Clarifies that Plans May Not Benefit All Employees

On October 31, the IRS issued Notice 2017-67, detailing requirements for the qualified small employer health reimbursement arrangements (QSEHRAs) implemented last December by the 21^st Century Cures Act. The law removes from the definition of “group health plan” reimbursement arrangements that follow the law’s requirements. Removing such plans from the definition of “group health plan” means exempting them from the requirements of Affordable Care Act's market reforms, including the “no annual dollar limits” and “no cost sharing for preventive health services.” Thus, by following the requirements of this law, eligible small employers may offer stand-alone HRAs to their employers without being subjected to onerous excise penalty under section 4980D of the Internal Revenue Code.

Although QSEHRAs may be useful for some small employers, for others they may not. The plans are likely most beneficial if employees have individual health insurance under a grandfathered plan. If employees must buy coverage on the Marketplace, the QSEHRA may make them ineligible for a premium tax credit (PTC) or merely reduce the PTC to which they would otherwise be entitled. If an employee has insurance coverage through a spouse’s employer, the QSEHRA may reimburse for those premiums. If the spouse can pay those premiums on a tax-free basis, however, the QSEHRA reimbursement is taxable. In other words, the employer could provide the same economic benefit to the employee by raising wages.

Continue reading here.

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November 2017

New Emissions Reporting Requirements for Animal Farms Delayed until January

IRS Notice Expands Penalty Relief for Partnerships

We delayed sending our November newsletter (which would typically be sent the last day of the month), until after the Senate vote so that we could provide you with the most up-to-date information on tax reform.

Modifying the Individual Tax Brackets

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