"Non-Performing Artists" Wait On IRS Final Regulations Under Section 199a

In early August, the Internal Revenue Service (IRS) issued proposed regulations under the Tax Cuts and Jobs Act (TCJA) that provide guidance to owners of pass-through businesses as to eligibility for a federal tax deduction of 20% of the income generated by the businesses under new Section 199A of the Internal Revenue Code (IRC). Although the stated purpose of the proposed regulations is to provide clarity on eligibility for and the means to compute the deduction, this guidance created ambiguity and confusion in several areas, including the applicability of the new deduction to persons who are involved in the entertainment industry but who do not perform on stage or in front of a microphone such as directors, producers, makeup artists, editors and the like.