The American Bankers Association, the Independent Community Bankers of America and the Subchapter S Bank Association today filed a comment letter on the IRS’ proposed regulations implementing the 20 percent deduction for pass-through entities under the 2017 tax reform law. While the associations — which have been working together with bankers to monitor the tax treatment of Subchapter S banks — welcomed positive language in the proposed rules, they noted that several aspects of the rules are uncertain, including questions on the qualification for the deduction for certain common business activities of banks.
The groups advocated that all banking activities should be eligible for the deduction and provided specific recommendations on definitions and the mechanics of the calculations required under the tax law. The letter will be a basis for continuing advocacy with the IRS as it prepares the final regulations. ABA recently issued a staff analysis that describes in more detail where additional guidance is needed in the final regulations. For more information, contact ABA’s John Kinsella or Curtis Dubay.
