House unanimously approves IRS reform bill

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House lawmakers on Tuesday, April 9 approved by unanimous consent the IRS reform bill, the “Taxpayer First Act of 2019” (H.R. 1957). The legislation represents the first transformative revisions to the IRS since 1998. Senate Finance Committee Chairman Charles E. Grassley, R-Iowa and ranking member Ron Wyden, D-Ore., have introduced companion legislation in the Senate. Senate leadership, however, has not determined when it will take up the bill.

The House had approved similar legislation in December 2018, but the Senate never voted on it.

The Taxpayer First Act would restrict the IRS’s use of private debt collectors, establish an independent office of appeals, strengthen the agency’s cybersecurity and better protect taxpayers identities. The measure would also make improvements to the IRS whistleblower program.

Credit for Plug-in Electric Vehicles

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Under IRC Sec. 30D(e)(2), the credit for new qualified plug-in electric drive motor vehicles is phased out over a period of four calendar quarters once the total number of qualifying vehicles sold by a manufacturer after 2009 reaches 200,000. In a recent Notice, the IRS announced that General Motors, LLC reached this limit during the calendar quarter ending 12/31/18. Therefore, qualifying General Motors vehicles are eligible for the full $7,500 credit if they are purchased before 4/1/19. A reduced credit of $3,750 applies to vehicles purchased from 4/1/19 through 9/30/19. From 10/1/19 through 3/31/20, the credit will be reduced to $1,875. After 3/31/20, no credit will be available. Notice 2019-22 and News Release IR 2019-57.

Retirement reform bill introduced in House

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On Saturday (March 30), a bipartisan retirement reform bill was introduced in the House. The bill, “Setting Every Community up for Retirement Enhancement (SECURE) Act of 2019,” contains a number of measures aimed at expanding and preserving retirement savings, providing administrative improvement, and raising revenue. The bill was sponsored by House Ways and Means Committee Kevin Brady (R-TX), Representative Mike Kelly (R-PA), Ways and Means Committee Chairman Richard Neal (D-MA), and Representative. Ron Kind (D-WI).

Provisions in the bill would:

…simplify the nonelective contribution 401(k) safe harbor;

…increase the credit amount for small employer plan start-up costs;

…create a small employer automatic enrollment tax credit of up to $500 per year;

…repeal the maximum age limit on contributions to a traditional IRA;

…increases the required minimum distribution age to 72;

…allow transfers of to a plan or IRA of lifetime income investments or distributions of a lifetime income investment in the form of a qualified plan distribution annuity in certain circumstances;

…allow penalty-free withdrawals from retirement plans for births or adoption distributions; and

…expand the Code Sec. 529 education savings accounts to cover costs associated with registered apprenticeships, homeschooling, up to $10,000 of qualified student loan repayments, and private elementary, secondary, or religious schools.