IRS to issue guidance on state efforts to circumvent tax-law provision


ㅤ"Some tax experts have questioned whether the IRS would give a green light to the SALT cap workarounds, arguing that the agency might not see the donations to state and local funds as truly charitable in nature.
ㅤTreasury and the IRS said in their notice that ‘the proposed regulations will make clear that the requirements of the Internal Revenue Code, informed by substance-over-form principles, govern the federal income tax treatment of such transfers.’
ㅤThe agencies also said that ‘taxpayers should be mindful that federal law controls the proper characterization of payments for federal income tax purposes.’
ㅤJared Walczak, senior policy analyst with the Tax Foundation, said that the emphasis in the notice on the ‘substance-over-form’ doctrine suggests that Treasury and the IRS will treat the donations as tax obligations that are not deductible, even if states call them charitable contributions.
ㅤ’It doesn’t matter what label you apply, if you are satisfying a tax obligation, the IRS will treat it as such,’ he said.’"ㅤ

Full story at The Hill, image from padailypost(.com) – 5/23/18. See "salt, salt deduction."ㅤHome

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