Two Years After Passage, Treasury Regulations for the Tax Cuts and Jobs Act Surpass 1,000 Pages

December 12, 2019

Garrett Watson

Garrett Watson

Two years after passage of the Tax Cuts and Jobs Act (TCJA), the U.S. Treasury Department continues the process of proposing and finalizing regulations related to enforcement and administration of the reforms outlined in the law. The volume of regulations issued related to the TCJA highlights the scope of the change in tax law since its passage.

According to our calculations from a list compiled by San Jose State University professor Annette Nellen, the Treasury has released 1,025 pages of regulations related to TCJA.

Most recently, Treasury released final regulations on the base erosion and anti-abuse tax (BEAT), which is meant to dissuade firms from engaging in profit shifting abroad. Other high-profile releases from 2019 include final regulations guiding enforcement of Section 199A, commonly known as the pass-through deduction; final regulations on enforcing the new tax on global intangible low-tax income (GILTI); and final regulations on state-level workarounds to the $10,000 limit on the state and local tax deduction (SALT).

In addition to better-known regulations, Treasury issued proposed or final regulations on TCJA-related provisions for items such as valuation rules for the personal use of employer-provided vehicles and modifying discounting rules for insurance companies. While these provisions may not be relevant for many taxpayers, they are vital for guiding economic decisions for taxpayers in affected industries.

The Treasury Department is finalizing 21 sets of proposed regulations after taking comments from taxpayers and is going through an internal review and revision process in coordination with the Internal Revenue Service (IRS) and the Office of Information and Regulatory Affairs (OIRA)

Of the 21 sets of regulations, four were issued in late 2018 and will likely be finalized in the coming months. This includes, for example, proposed rules on the net interest deduction limitation. Currently, OIRA is reviewing proposed regulations on qualified opportunity funds for opportunity zones, which should be released in the coming weeks.

While the regulatory process may be followed less on a day-to-day basis than legislative battles on the Hill, it remains an important part of the administration and enforcement of the tax system. Taxpayers rely on guidance from the Treasury Department and IRS when making economic decisions, making them just as important as the legislation underpinning the regulations.

The TCJA brought huge changes to the federal tax code, which explains the volume of regulations issued by Treasury and the IRS in the following two years. We should expect another increase in tax-related regulatory guidance if tax proposals by policymakers and presidential candidates are enacted post-2020.

Topic Citation Page Count Year Status Link

Limitation on Deduction for Dividends Received from Certain Foreign Corporations and Amounts Eligible for Section 954 Look-Through Exception

 TD 9865 and REG 106282-18 29 2019 Final and Proposed Regs Download

Tax Return Preparer Due Diligence Penalty

 TD 9842 5 2018 Final Regs Download

Additional First Year Depreciation Deduction

 TD 9874 43 2019 Final Regs Download

Amount Determined Under Section 956 for Corporate United States Shareholders

 TD 9859 4 2019 Final Regs Download

Contributions in Exchange for State or Local Tax Credits

 TD 9864 19 2019 Final Regs Download

Electing Small Business Trusts with Nonresident Aliens as Potential Current Beneficiaries

 TD 9868 3 2019 Final Regs Download

Estate and Gift Taxes; Difference in the Basic Exclusion Amount

 TD 9884 6 2019 Final Regs Download

Guidance Regarding the Transition Tax Under Section 965 and Related Provisions

 TD 9846 78 2019 Final Regs Download

Modification of Discounting Rules for Insurance Companies

 TD 9863 6 2019 Final Regs Download

Ownership Attribution for Purposes of Determining whether a Person Is Related to a Controlled Foreign Corporation; Rents Derived in the Active Conduct of a Trade or Business

 TD 9883 3 2019 Final Regs Download

Qualified Business Income Deduction

 TD 9847 63 2019 Final Regs Download

Regulations Regarding Advance Payments for Goods and Long-Term Contracts

 TD 9870 2 2019 Final Regs Download

Regulations To Prescribe Return and Time for Filing for Payment of Taxes and to Update the Abatement Rules for Taxes

 TD 9855 2 2019 Final Regs Download

Guidance  Related  to Section 951A (Global  Intangible  Low-Taxed  Income) and Certain Guidance  Related  to Foreign Tax  Credits

 TD 9866 83 2019 Final Regs Download

Base Erosion and Anti-Abuse Tax

 TD 9885 78 2019 Final Regs Download

Certain Hybrid Arrangements

 REG–104352–18  40 2018 Proposed Regs Download

Gain or Loss of Foreign Persons from Sale or Exchange of Certain Partnership Interests

 REG-113604-18  9 2018 Proposed Regs Download

Guidance Related to the Foreign Tax Credit, Including Guidance Implementing Changes Made by the Tax Cuts and Jobs Act

 REG-105600-18  67 2018 Proposed Regs Download

Limitation on Deduction for Business Interest Expense

 REG-106089-18 121 2018 Proposed Regs Download

Advance Payments for Goods, Services, and Other Items

 REG-104554-18 17 2019 Proposed Regs Download

Contribution Limits Applicable to ABLE Accounts

 RIN 1545–BP10 5 2019 Proposed Regs Download

Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income

 REG-104464-18 47 2019 Proposed Regs Download

Determination of the Maximum Value of a Vehicle for Use with the Fleet-average and Vehicle Cents-per-mile Valuation Rules

 REG 101378-19 5 2019 Proposed Regs Download

Electing Small Business Trusts with Nonresident Aliens as Potential Current Beneficiaries

 REG-117062-18 5 2019 Proposed Regs Download

Eligible Terminated S Corporations

 REG 131071-18 15 2019 Proposed Regs Download

Guidance on Passive Foreign Investment Companies

 REG 105474-18 42 2019 Proposed Regs Download

Guidance on the Determination of the Section 4968 Excise Tax Applicable to Certain Private Colleges and Universities

 REG 10877-18 14 2019 Proposed Regs Download

Guidance Under Section 958 (Rules for Determining Stock Ownership) and Section 951A (Global Intangible Low–Taxed Income)

 REG 101828-19 20 2019 Proposed Regs Download

Information Reporting for Certain Life Insurance Contract Transactions and Modifications to the Transfer for Valuable Consideration Rules

 REG-103083-18 20 2019 Proposed Regs Download

Investing in Qualified Opportunity Funds

 REG-120186-18 42 2019 Proposed Regs Download

Ownership Attribution Under Section 958 Including For Purposes of Determining Status as Controlled Foreign Corporation or United States Shareholder

 REG-104223-18 13 2019 Proposed Regs Download

Regulations under Section 382(h) Related to Built-in Gain and Loss

 REG-125710-18 19 2019 Proposed Regs Download

Section 199A Rules for Cooperatives and Their Patrons

 REG 118425-18 39 2019 Proposed Regs Download

Taxable Year of Income Inclusion under an Accrual Method of Accounting

 REG-104870-18 20 2019 Proposed Regs Download

Withholding of Tax and Information Reporting with Respect to Interests in Partnerships Engaged in the Conduct of a U.S. Trade or Business

 REG 195476-18 28 2019 Proposed Regs Download

Additional Rules Regarding Base Erosion and Anti-Abuse Tax

 REG 112607-19 13 2019 Proposed Regs Download
Total Page Count 1025      

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An S corporation is a business entity which elects to pass business income and losses through to its shareholders. The shareholders are then responsible for paying individual income taxes on this income. Unlike subchapter C corporations, an S corporation (S corp) is not subject to the corporate income tax (CIT).

Withholding is the income an employer takes out of an employee’s paycheck and remits to the federal, state, and/or local government. It is calculated based on the amount of income earned, the taxpayer’s filing status, the number of allowances claimed, and any additional amount of the employee requests.

A tax deduction is a provision that reduces taxable income. A standard deduction is a single deduction at a fixed amount. Itemized deductions are popular among higher-income taxpayers who often have significant deductible expenses, such as state/local taxes paid, mortgage interest, and charitable contributions.

The Tax Cuts and Jobs Act in 2017 overhauled the federal tax code by reforming individual and business taxes. It was pro-growth reform, significantly lowering marginal tax rates and cost of capital. We estimated it reduced federal revenue by $1.47 trillion over 10 years before accounting for economic growth.

An excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections.

Depreciation is a measurement of the “useful life” of a business asset, such as machinery or a factory, to determine the multiyear period over which the cost of that asset can be deducted from taxable income. Instead of allowing businesses to deduct the cost of investments immediately (i.e., full expensing), depreciation requires deductions to be taken over time, reducing their value and discouraging investment.

A tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly.