Developing a TCJA Checklist: International issues, software selection, and involvement of tax technologists all play key roles in a complicated process.

• Position: Tax Cuts and Jobs Act of 2017 - Discussion

The Tax Cuts and Jobs Act is not "new" anymore. But compliance with an ever-evolving set of regulations and guidance is still on the front burner for corporate tax professionals--and is likely to stay there for quite a while. As with so many tax issues, the best way to ensure compliance is to make a checklist. In the case of the TCJA, however, that's easier said than done. We put together a roundtable of experts to find out their thoughts about how to develop that checklist. They are Nancy Chassman, partner at Roberts & Holland LLP; George Farrah, vice president of content and analysis at Bloomberg Tax; Councill Leak, senior vice president and tax director at Leidos; and Elizabeth Sponsel, partner and national leader, corporate tax office, at RSM US LLP. The roundtable, which took place in November 2018, was moderated by Michael Levin-Epstein, senior editor of Tax Executive.

Michael Levin-Epstein: What are the major content areas that would inform a TCJA checklist?

Elizabeth Sponsel: Of course, domestically, tax reform has a significant impact on various areas such as choice of entity, bonus depreciation, business loss deduction, meals and entertainment deductions, and Section 199A. But for some it is even more significant on the international side--given GILTI, BEAT, FDII, and the repatriation tax--since this requires taxpayers to think through structural implications, as well as the specific tax attributes, in order to best take advantage or minimize negative impact of the new legislation. It requires taking a step back and asking "What can we do from a planning perspective, what will this mean to the business, and who needs to know about this now?" in addition to thinking about how best to comply with the new regulations.

Nancy Chassman: I would agree that the areas Elizabeth highlighted certainly are going to be at the top of a TCJA compliance checklist. These areas will also be a focus of the IRS when a taxpayer's audit cycle hits for the years under the 2017 tax reform. On the domestic side, I think the IRS is likely to scrutinize Section 199A, specifically whether taxpayers are accurately representing income as being generated from a trade or business that is eligible for the deduction. On the international side, Section 965, the repatriation of foreign E&P, the IRS will be looking at the E&P and PTI calculations that the taxpayers have done. It is likely that the IRS will also focus on audits of the valuation methodologies used by taxpayers in determining amounts under the GILTI and FDII provisions.

Councill Leak: The content areas noted by Elizabeth and Nancy are prominent in the Tax Act checklist that Leidos created early in 2018. We will use the checklist over the next few months to help us make sure our year-end tax accounting is complete and to finalize any true-ups to the initial accounting for the Tax Act implementation in 2017. The SEC gave companies one year to true those...