The PATH Act of 2015 announced
On December 16, 2015, Senate Finance Committee Chairman Orrin Hatch (R-Utah), House Ways and Means Committee Chairman Kevin Brady (R-Texas), and Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) announced the Protecting Americans from Tax Hikes (PATH) Act of 2015. This legislation was designed to provide permanent tax relief for hard-working American families, college students, charities, small business and enterprises on the forefront of innovation.
Among the provisions enacted by the passage of the PATH Bill are a number of items that may be of direct interest to NSA members. These provisions include the following sections:
- Section 124. Extension and modification of increased expensing limitations and treatment of certain real property as section 179 property.
The provision permanently extends the small business expensing limitation and phase-out amounts in effect from 2010 to 2014 ($500,000 and $2 million, respectively). These amounts currently are $25,000 and $200,000, respectively. The special rules that allow expensing for computer software and qualified real property (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property) also are permanently extended. The provision modifies the expensing limitation by indexing both the $500,000 and $2 million limits for inflation beginning in 2016 and by treating air conditioning and heating units placed in service in tax years beginning after 2015 as eligible for expensing. The provision further modifies the expensing limitation with respect to qualified real property by eliminating the $250,000 cap beginning in 2016.
- Section 202. Safe harbor for de minimis errors on information returns and payee statements.
The provision establishes a safe harbor from penalties for the failure to file correct information returns and for failure to furnish correct payee statements by providing that if the error is $100 or less ($25 or less in the case of errors involving tax withholding), the issuer of the information return is not required to file a corrected return and no penalty is imposed. A recipient of such a return (e.g., an employee who receives a Form W-2) can elect to have a 9 corrected return issued to them and filed with the IRS. The provision is effective for returns and statements required to be filed after December 31, 2016.
- Section 210. Increase the penalty applicable to paid tax preparers who engage in willful or reckless conduct.
The provision expands the penalty for tax preparers who engage in willful or reckless conduct, which is currently the greater of $5,000 or 50 percent of the preparer’s income with respect to the return, by increasing the 50 percent amount to 75 percent. The provision applies to returns prepared for tax years ending after the date of enactment.
- Section 410. Clarification of enrolled agent credentials.
The provision permits enrolled agents approved by the IRS to use the designation “enrolled agent,” “EA,” or “E.A.” The provision is effective on the date of enactment.
A summary of the entire bill can be found at http://waysandmeans.house.gov/?attachment_id=39841003
The text of the entire bill can be found at http://waysandmeans.house.gov/wp-content/uploads/2015/12/PATH_Act_xml.pdf
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