While the Internal Revenue Services has made “considerable progress” implementing the tax overhaul of 2017, “much work remains” as the IRS and Treasury issued approximately half of planned official guidance, according to a just-released Government Accountability Office study.
Treasury failed to issue “all planned final regulations within the 18 months the agency generally has to issue regulations retroactive to the date of a law’s enactment or before taxpayers were required to file tax returns, which has the potential to be significant for both taxpayers and IRS,” GAO states in its 77-page report.
Of the 51 planned final regs to implement the law’s business and international provisions, “Treasury issued five within the 18-month time frame,” the report states.
Treasury also issued one temporary regulation within this time frame. Treasury did not release any final regulations for eight of its 12 priority provisions.
While taxpayers and other stakeholders “appreciated the supplemental information Treasury provided in the absence of final regulations,” IRS Chief Counsel officials say “a significant effect of relying on proposed regulations rather than final regulations is uncertainty.”
According to IRS, the 2017 overhaul was the most sweeping tax law change in more than three decades, with 86 provisions that modified, added to or repealed business and international taxes, such as the qualified business income deduction.