The BBA affords an extension for many previously expired statutory tax provisions for individuals and business entities, and the extension and phasedown of many energy tax incentive programs.

IRS Ready To Accept Returns Claiming Popular Renewed Benefits

The IRS recently announced that it has reprogrammed its processing systems and is ready to process the tax year 2017 returns claiming three popular tax benefits that were retroactively renewed by the Bipartisan Budget Act of 2018 ( P.L. 115-123), which was enacted on February 9:

·       the exclusion from gross income of discharge of qualified principal residence indebtedness (which is often foreclosure-related debt forgiveness), claimed on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment);

·       mortgage insurance premiums treated as qualified residence interest, generally claimed by low-and middle-income filers on Schedule A (Form 1040), Itemized Deductions; and

·       the deduction for qualified tuition and related expenses claimed on Form 8917, Tuition and Fees Deduction.

The IRS is continuing to update its systems to handle returns claiming other tax benefits that were extended by the Budget Act which generally affect a smaller number of taxpayers. Taxpayers eligible for these benefits can avoid delays or possibly need to file an amended return later by filing after IRS systems have been updated to reflect these changes.

Taxpayers who already filed their 2017 tax returns and now wish to claim one of the renewed tax benefits must do so by filing amended returns on Forms 1040X. Amended returns, however, cannot be filed electronically. The IRS estimates that it can take up to 16 weeks to process these returns. Further, the IRS has been earnestly working with tax professionals and the tax-preparation industry to ensure that the available software processes are capable of accommodating these new provisions.

IR-2018-33