Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 13 – May 17, 2019.

May 13, 2019: The IRS released a statement regarding the National Taxpayer Advocate position announcing it as seeking candidates from the tax community to fill the vacancy.

May 13, 2019: The IRS released two draft forms. Form 8027 for employer tip reporting under Section 6053 and Form 8922 for reporting third-party sick pay under Section 3121.

May 14, 2019: The IRS released a statement regarding the recent CCH software outage advising taxpayers with a May 15 deadline who file late and do not file an extension to include the phrase “Late filed return due to CCH Software Outage” as a statement of reasonable cause.

May 16, 2019: The IRS issued Notice 2019-35 providing guidance on the corporate bond monthly yield curve, spot segment rates under Section 417(e)(3) and the 24-month average segment rates under Section 430(h)(2).

May 16, 2019: The IRS issued Revenue Ruling 2019-14 providing monthly tables of prescribed rates under numerous Code sections, including the applicable federal rate for the month of June 2019.

May 16, 2019: The IRS issued a news release announcing it was now accepting applications for the Tax Counseling for the Elderly (TCE) grant program. There is a May 31 deadline for applications.

May 16, 2019: The IRS issued a news release announcing that the Large Business and International Division (LB&I) began a new application of data analytics for determining the population of large and complex corporate taxpayers.

May 17, 2019: The IRS released Proposed Regulations under Section 954(d)(3) regarding the attribution of ownership of stock and other interests for determining whether a person is a related person with regard to a controlled foreign corporation (CFC).

Special thanks to Terence McAllister in our New York office for this week’s roundup.

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 6 – 10, 2019.

May 7, 2019: The IRS released Revenue Procedure 2019-22 updating Revenue Procedure 75-50 in order to reflect technological advances. Revenue Procedure 75-50 provides guidelines to determine whether a private school has adopted racially nondiscriminatory policies for tax exemption purposes.

May 7, 2019: The IRS released Notice 2019-33 requesting comments regarding possible normalization issues stemming from the decrease in the corporate tax rate under Section 11 of the Code.

May 7, 2019: The IRS issued a news release recognizing National Small Business Week and reminding taxpayers that a tax identification number will now be required when requesting an employer identification number.

May 8, 2019: The IRS released Notice 2019-34 providing the inflation-adjusted maximum value of employer provided vehicles first made available to employees for personal use in 2019.

May 9, 2019: The IRS released Revenue Ruling 2019-13 ruling that if a former S corporation makes a Section 301 cash distribution during its post termination period it should reduce its accumulated adjustments account to the extent of the proceeds of the redemption.

May 9, 2019: The IRS issued a news release highlighting tax reform changes that impact depreciation and expensing for businesses as part of a series of news releases during National Small Business Week.

May 10, 2019: The IRS released final regulations providing guidance regarding qualified business units subject to Section 987 of the Code and withdrawing foreign currency partnership allocation rules.

Special thanks to Terence McAllister in our New York office for this week’s roundup.

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 29 – May 3, 2019.

April 29, 2019: The IRS issued a news release urging taxpayers who had not yet filed their tax returns to file now in order to minimize applicable penalties and interest.

April 30, 2019: The IRS issued a news release announcing the appointment of Monte A. Jackel to the position of special counsel to the Chief Counsel, Office of Chief Counsel. Jackel brings experience from both the public and private sector to the position.

May 1, 2019: The IRS announced the application period for low income taxpayer clinic grants will run from May 1, 2019 – June 17, 2019. The grants provide low income taxpayer clinics matching grants of up to $100,000 per year to develop, expand or maintain their programs.

May 1, 2019: The IRS released Revenue Procedure 2019-20 expanding its retirement plan determination letter program. The IRS now allows plan sponsors to submit determination letter applications for statutory hybrid plans and individually designed merged plans.

May 2, 2019: The IRS released Revenue Procedure 2019-21 providing guidance regarding the United States and area median gross income figures used by issuers of qualified mortgage bonds (defined in Section 143(a)), issuers of qualified mortgage certificates (defined in Section 25(c)) and in computing income requirements described in Section 143(f).

May 2, 2019: The IRS issued Notice 2019-32 requesting comments on issues arising under the carbon dioxide sequestration credit under Section 45Q in anticipation of Treasury and the IRS issuing regulations and other guidance under Section 45Q.

May 3, 2019: As part of the National Weather Service’s Hurricane Preparedness Week, the IRS issued a news release providing taxpayers advice regarding emergency preparation, and providing details on the IRS’ toll-free disaster hotline.

Special thanks to Terence McAllister in our New York office for this week’s roundup.

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 22–26, 2019.

April 22, 2019: In an effort to reduce paperwork and respondent burden the IRS requested public comments on forms, reporting and recordkeeping requirements under numerous code provisions.

April 24, 2019: The IRS issued corrections to T.D. 9851 providing guidance on the income test used to determine whether a corporation may qualify as a regulated investment company (RIC).

April 24, 2019: The IRS issued Notice 2019-30 an annual notice, requesting recommendations for items that should be included in the 2019–2020 Priority Guidance Plan.

April 25, 2019: The IRS issued a news release seeking applications for the Electronic Tax Administration Advisory Committee (ETAAC). The ETAAC serves as a public forum for discussion of issues related to electronic tax administration.

April 25, 2019: IRS chief counsel Michael Desmond announced the appointment of Peter Blessing to the position of Associate Chief Counsel, International, Office of Chief Counsel.

April 26, 2019: The IRS issued a news release alerting taxpayers to the ability to perform a Paycheck Checkup using the IRS Withholding Calculator. The IRS particularly encouraged taxpayers to check their withholding in light of the many changes brought about by the Tax Cuts and Jobs Act (TCJA).

Special thanks to Terence McAllister in our New York office for this week’s roundup.

A recent case decided by the US Tax Court reminds us that when you litigate a case in Tax Court, what happened during the Internal Revenue Service (IRS) examination and Appeals bears very little relevance (if any) once you get to court. Generally, Tax Court’s proceedings are de novo, and the court looks solely to the IRS’s position in the Notice of Deficiency (Notice). The Revenue Agent’s Report and other statements made by the IRS before the issuance of the Notice are typically ignored.

In Moya v. Commissioner, 152 TC No. 11 (Apr. 17, 2019), the IRS determined deficiencies related to the disallowance of certain business expense deductions. The taxpayer did not assign error to the disallowance, but instead argued that the Notice was invalid because the IRS had violated her right to be informed and her right to be heard under an IRS news release and an IRS publication outlining various rights of taxpayers. Specifically, the taxpayer asserted that she had requested that her examination proceedings be transferred to California after she had moved from Las Vegas to Santa Cruz, and that the IRS had violated the her rights by providing vague and inconsistent responses to, and by ultimately denying, her request. Continue Reading What Happens At Exam, Stays At Exam!

When you do not pay your taxes, the Internal Revenue Service (IRS) has the power to file a “lien” on your property under Internal Revenue Code section 6321. The lien attaches “upon all property and rights to property, whether real or personal, belonging to such person.” Practically, this means that the IRS is giving notice that you owe it money and its debt gets priority to most debts that occur after the lien notice is filed. Historically, the lien law has been interpreted strictly and “foot faults” can invalidate the lien. A recent case, however, provides that if the federal tax lien uses the incorrect name, the lien may still be established and enforceable.

The taxpayer and his wife purchased their home as joint tenants in 1975. The taxpayer became the sole owner of the property after his wife passed away. In July 2007, the taxpayer filed federal income tax returns for tax years 2000 to 2004. Based on those returns, the IRS assessed taxes, penalties and interest, which remained outstanding at the time of his death in July 2009. On August 9, 2010, the government recorded a notice of federal tax lien (the Tax Lien Notice) against the taxpayer with the appropriate recorder of deeds in an amount equal to the previously assessed amounts. The Tax Lien Notice omitted the second “l” in the taxpayer’s first name, and failed to include a legal description or permanent index number for the property. The Tax Lien Notice did identify the correct address. Continue Reading Seventh Circuit Upholds Lien Notice despite Incorrect Name

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 15 – 19, 2019.

April 16, 2019: The IRS issued Revenue Ruling 2019-12 providing monthly tables of prescribed rates under numerous Code sections, including the applicable federal rate for May.

April 16, 2019: The IRS issued Notice 2019-29 providing guidance on the corporate bond monthly yield curve, spot segment rates under Section 417(e)(3) and the 24 month average segment rates under Section 430(h)(2).

April 17, 2019: The IRS released Proposed Regulations offering highly anticipated additional guidance related to investment in opportunity zones.

April 17, 2019: The IRS issued numerous corrections for Treasury Decision 9847 providing guidance under Section 199A of the code.

April 18, 2019: The IRS released Proposed Regulations relating to rules for electing small business trusts with nonresident alien beneficiaries.

April 18, 2019: The IRS issued a News Release detailing a six year plan to modernize the agency’s IT systems.

April 19, 2019: The IRS issued Revenue Procedure 2019-19 providing updated information regarding the Employee Plans Compliance Resolution System.

Special thanks to Terence McAllister in our New York office for this week’s roundup.

Most tax professionals are aware of the common-law “mailbox rule,” which provides that proof of proper mailing creates a rebuttable presumption that the document was physically delivered to the addressee. Internal Revenue Code (Code) section 7502 was enacted to codify the mailbox rule for tax purposes. Thus, for documents received after the applicable deadline, the document will be deemed to have been delivered on the date the document is postmarked. To protect taxpayers against a failure of delivery, Code section 7502 also provides that when a document is sent by registered mail, the registration serves as prima facie evidence that the document was delivered, and the date of registration is treated as the postmark date. In other words, if the Internal Revenue Service (IRS) claims not to have received a document, the presumption arises that such document was delivered so long as the taxpayer produces the registration.

Continue Reading Ninth Circuit Allows IRS to Overrule Common-Law Mailbox Rule

The Internal Revenue Service (IRS) Large Business and International (LB&I) Division continues to churn out new audit “campaigns.” For our prior coverage, please click here. The most recent set of campaigns were announced on April 16, 2019, bringing the grand total to 53 campaigns since the program’s initial release on January 13, 2017. The IRS explains that the goal of the campaigns is to “improve return selection, identify issues representing a risk of non-compliance, and make the greatest use of limited resources.”

Continue Reading IRS Announces More LB&I Campaigns!

Borenstein v. Commissioner is an interesting opinion involving the intersection of canons of statutory construction and jurisdiction. Recently, the US Court of Appeals for the Second Circuit reversed the US Tax Court’s holding in Borenstein that the court lacked jurisdiction to order a refund of an undisputed overpayment made by the taxpayer. The case, which we discussed in a prior post, involved interpreting statutory provisions dealing with claims for a refund after a notice of deficiency was issued. The Tax Court’s holding was based on the application of the plain meaning rule to Internal Revenue Code (Code) Section 6512(b)(3), which limit its jurisdiction to order refunds of overpayments.

Continue Reading Second Circuit Weighs in on Tax Court’s Refund Jurisdiction