IRS Updates Process for FAQs on New Tax Legislation

The IRS has updated its process for certain frequently asked questions (FAQs) on newly enacted tax legislation. The Service will now announce significant FAQs on newly enacted tax legislation, as well as any later updates or revisions to these FAQs, in a news release and will post it on IRS.gov in a separate Fact Sheet. These Fact Sheet FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Additionally, prior versions of Fact Sheet FAQs will be maintained on IRS.gov to ensure that, if a Fact Sheet FAQ is later changed, taxpayers can locate the version they relied on if they later need to do so.

In a major development, the IRS has also issued a statement clarifying that if a taxpayer relies on any FAQ (including FAQs released before today) in good faith and that reliance is reasonable, the taxpayer will have a reasonable cause defense against any negligence penalty or other accuracy-related penalty if it turns out the FAQ is not a correct statement of the law as applied to the taxpayer’s particular facts. For more information on taxpayer reliance, the taxpayers are requested to read the General Overview of Taxpayer Reliance on Guidance Published in the Internal Revenue Bulletin and FAQs.