Legislation passed by Congress this week extending a trade deal between the U.S. and sub-Saharan Africa included a number of tax-related provisions.
The bill, known as H.R. 1295, the Trade Preferences Extension Act of 2015, was originally known as the IRS Bureaucracy and Judicial Review Act, but underwent substantial revisions to encompass the international trade legislation.
Among the tax-related offsets in the bill are provisions requiring a payee statement to claim certain education tax benefits, such as the American Opportunity Tax Credit and the Hope Credit.
There is also a special rule for educational institutions that are unable to claim certain education tax benefits. In addition, there is a special rule for educational institutions unable to collect Taxpayer Identification Numbers of individuals with respect to higher education tuition and related expenses.
The bill also provides for a penalty for failure to file correct information returns and provide payee statements. The $100 per return penalty rises to $250, and maximum annual penalty goes from $1.5 million to $3 million, according to the Journal of Accountancy. If the failure is corrected within 30 days, the penalty increases from $30 to $50, while the maximum annual penalty increases from $250,000 to $500.000.
Under another provision of the bill, the child tax credit is not refundable for taxpayers electing to exclude foreign earned income from tax.
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