The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register a notice of proposed rulemaking (REG-119307-19) that reflects changes made to section 274 by the 2017 U.S. tax law (Pub. L. No. 115-97), that is the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA).
The proposed regulations [PDF 351 KB] address the elimination of the deduction under section 274 for expenses related to certain transportation and commuting benefits provided by employers to their employees in tax years beginning after December 31, 2017.
The preamble explains that these proposed regulations provide guidance to determine the amount of such expenses that is nondeductible and apply certain exceptions under section 274(e) that may allow such expenses to be deductible.
Read a related IRS release, IR-2020-125 (June 19, 2020).
Section 274 was amended by the TCJA to disallow a deduction for the expense of any qualified transportation fringe provided to an employee of the taxpayer, effective for amounts paid or incurred after December 31, 2017.
The TCJA also added:
The purpose of this report is to provide text of the proposed regulations.
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