The Treasury Department on Monday submitted to the Office of Management and Budget the first group of proposed regulations related to a provision of the tax reform bill that established a 20 percent deduction for pass-through entities, including Subchapter S corporations. OMB has 10 days to review and approve the regulations before they are issued publicly for comment.
While it is unclear which specific issues this first set of regulations will address, it is anticipated that additional regulations will follow in the coming months. The 20 percent deduction for pass-through entities is one of the most critical remaining regulatory issues for the banking industry that arose from the tax reform bill. The American Bankers Association has closely monitored developments in this area and will continue to do so as Treasury and OMB release more regulations.
In partnership with other trade organizations, ABA has provided information to Treasury and the Internal Revenue Service on this issue and urged them to follow the intent of Congress with respect to the treatment of banks operating as S-corps. ABA will closely review the regulations as they are released and will provide feedback.
