ABA this week filed a comment letter on regulations proposed by the IRS on the timing of income inclusion under Section 451 of the Internal Revenue Code, as required by the tax reform law. Under the 2017 law, certain types of income are required to be recognized as taxable income no later than the income of applicable financial statements.
In the letter, ABA expressed concerns that the proposed regulations apply overly broad definitions in determining the amount of income that is required to be included in taxable income. As a result, the proposed regulations could potentially create distortions in the recognition of gross income and closely related expenses. ABA recommended that the IRS reconsider the proposed approach, and outlined specific changes to related regulations to address these concerns. In addition, ABA called on the IRS to continue certain existing guidance dealing with selected types of credit card fees.