The American Institute of CPAs wants Congress to reintroduce legislation to make various technical corrections in the tax laws.

In a letter Wednesday, the AICPA urged leaders of Congress’s tax committees, the House Ways and Means Committee and the Senate Finance Committee, to reintroduce the Tax Technical Corrections Act of 2016. It was originally introduced last December in both houses of Congress by Democrats and Republicans.

Several provisions in the legislation “are of unusually high importance since failure to enact them has an immediate negative impact on both the IRS and taxpayers,” AICPA Tax Executive Committee chair Annette Nellen wrote in a letter Wednesday.

AICPA building in Durham, N.C.
AICPA building in Durham, N.C. Photo: AICPA

She pointed to provisions governing Individual Taxpayer Identification Numbers and partnership audit rules. The procedures used by overseas taxpayers to obtain or renew their ITINs were changed by Congress so taxpayers abroad couldn't continue to use a community-based Certifying Acceptance Agent to process their ITIN applications.

“This change has imposed an unduly harsh burden on taxpayers residing overseas who are attempting to fulfill their United States (U.S.) tax filing obligations,” Nellen wrote.

A new requirement to renew all ITINs issued before Jan. 1, 2013 has led to a surge of ITIN holders abroad needing help, Nellen noted. The technical correction in the proposed legislation would make it clear that ITIN holders living in other countries could use community-based Certifying Acceptance Agents.

The technical corrections to the new partnership audit rules would make it easier for the IRS and taxpayers to deal with them, Nellen wrote. The fixes would also give taxpayers more certainty about the taxes they owe following an IRS examination.

The partnership audit rules proposed in January under a new “Centralized Partnership Audit Regime” by the Treasury Department and the Internal Revenue Service were withdrawn because they weren’t submitted to the Federal Register before the new administration’s regulatory freeze took effect (see New partnership audit rules require major decisions). However, the IRS and the Treasury are expected to re-issue the proposed rules.

The withdrawn proposed regulations refer to the possibility of the technical corrections provisions being enacted by Congress and the probable need to modify and re-issue portions of the regulations after the technical corrections are enacted. If Congress passed the technical corrections before the proposed rules were re-issued, they might be modified before being re-issued and make the guidance process more efficient, as well as providing greater certainty to taxpayers, Nellen pointed out.

She stressed that, while the partnership audit rules generally are not effective until after 2017, there are some important actions partnerships and partners must deal with right away. “The need for final regulatory guidance is crucial,” Nellen wrote.

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