Daily Tax Update - June 20, 2017: Speaker Ryan Urges Comprehensive Tax Reform

Speaker Ryan Urges Comprehensive Tax Reform:  Today, in a speech at the National Association of Manufacturers’ annual summit, House Speaker Paul Ryan (R-WI) urged passage of comprehensive tax reform by the end of 2017. The speech largely followed the GOP tax reform blueprint. Among the policies for individuals mentioned by Speaker Ryan were the elimination of the estate tax and the alternative minimum tax, the reduction of the number of individual tax brackets from seven to three, and the retention of the mortgage interest, charitable contribution, and retirement savings deductions. Speaker Ryan also called for a lower corporate tax rate and a transition to a territorial system, but in his prepared remarks, he did not mention the border adjustment proposal that has been a controversial part of the blueprint.

IRS Releases Guidance on Substantial Compliance for International Information Returns:  Yesterday, the IRS released an international practice unit (IPU) on determining whether Forms 5471 and 5472 are substantially complete for penalty purposes. The IPU states that if the particular information or requirement at issue is determined to be related to the “substance or essence” of the statute or regulation, then strict compliance is necessary. However, if the requirement is seen as “procedural or directory,” then substantial compliance can apply. IPUs are internal documents used by IRS staff as job aids and training materials in compliance efforts.