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Weekly IRS Roundup October 12 – October 16, 2020

By McDermott Will & Emery on Oct 19, 2020
Posted In IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 12, 2020 – October 16, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here. October 13, 2020: The IRS published final regulations related to the absorption of consolidated net operating loss (CNOL) carryovers and carrybacks, as well as consolidated groups that include both life insurance companies and other companies. October 14, 2020: The IRS released a draft of instructions for Form 5472 related to an information return of a 25% foreign-owned US corporation or a foreign corporation engaged in a US trade or business. October 16, 2020: The IRS published Revenue Ruling 2020-22 updating the applicable federal rate (AFR) for November 2020. October 16, 2020: The IRS published Notice 2020-47 updating the weighted average interest rate, the yield curve and segment rates used...

Weekly IRS Roundup October 5 – October 9, 2020

By McDermott Will & Emery on Oct 14, 2020
Posted In IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 5, 2020 – October 9, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here. October 7, 2020: The IRS published final regulations related to the withholding tax and information reporting requirements for the sale, exchange or redemption of a partnership interest held by a foreign person. October 7, 2020: The IRS published a draft of Publication 509 with draft tax calendars for 2021. October 9, 2020: The IRS published Revenue Ruling 2020-19 related to changes in basis of computing life insurance reserves. October 9, 2020: The IRS published Revenue Procedure 2020-44 to facilitate a transition from interbank offered rates to alternate reference rates. October 9, 2020: The IRS released Internal Revenue Bulletin 2020-42, dated October 13, 2020, containing the following...

Weekly IRS Roundup September 28 – October 2, 2020

By McDermott Will & Emery on Oct 7, 2020
Posted In IRS Guidance, Settlements, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 28, 2020 – October 2, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here. September 29, 2020: The IRS published final regulations related to the source of income for certain property sales and modifying rules for determining whether foreign source income is effectively connected with a US trade or business. September 29, 2020: The IRS published final regulations related to a wide range of foreign tax credit topics. The regulations provide guidance on the allocation and apportionment of deductions and creditable foreign taxes, the definition of financial services income, foreign tax redeterminations, availability of foreign tax credits under the transition tax, the application of the foreign tax credit limitation to consolidated groups, adjustments to hybrid deduction...

Weekly IRS Roundup September 21 – September 25, 2020

By McDermott Will & Emery on Oct 2, 2020
Posted In IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 21, 2020 – September 25, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here. September 21, 2020: The IRS released Announcement 2020-12 to detail information reporting requirements for taxpayers seeking forgiveness of Paycheck Protection Program loans under the Coronavirus Aid, Relief and Economic Security (CARES) Act. September 21, 2020: The IRS published final regulations related to bonus depreciation. The rules provide additional guidance to final regulations issued in 2019. September 21, 2020: The IRS published final regulations providing guidance for certain foreign persons that recognize gain or loss from the sale or exchange of an interest in a partnership that is engaged in a trade or business within the United States. September 21, 2020: The IRS published...

Weekly IRS Roundup September 14 – September 18, 2020

By McDermott Will & Emery on Sep 22, 2020
Posted In IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 14, 2020 – September 18, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here. September 14, 2020: The IRS published final regulations providing guidance on the limitation on the deduction for business interest expense after amendment of the Internal Revenue Code (Code) by the Tax Cuts and Jobs Act (TCJA) and the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The regulations provide guidance to taxpayers on how to calculate the limitation, what constitutes interest for purposes of the limitation, which taxpayers and trades or businesses are subject to the limitation and how the limitation applies in consolidated group, partnership, international and other contexts. The final regulations vary slightly from the document released on IRS.gov on July 28,...

Are Crypto Loans Taxed as Loans?

By Andrea Kramer on Sep 18, 2020
Posted In IRS Guidance, Tax Reform

Transactions involving the borrowing and lending of units of virtual currency (or crypto loans) are increasing in number and type. Lacking Treasury or IRS guidance with respect to crypto loans, potential tax issues that arise from these transactions must be analyzed and understood in accordance with broad, general tax principles established by case law and based on government guidance developed in other tax areas. Access the full article here.

Taxation of Virtual Currency Staking Activities

By Andrea Kramer on Sep 16, 2020
Posted In IRS Guidance, Tax Reform

Stakers—taxpayers involved in proof of stake (PoS) validation of blockchain transactions—are operating in uncharted tax waters. Treasury and the IRS have provided no guidance regarding when or whether staking rewards are included in taxable income. This article reviews various considerations that may help stakers document activities, rewards and expenses that support their federal and state tax positions. Access the full article here.

Weekly IRS Roundup September 7 – September 11, 2020

By McDermott Will & Emery on Sep 14, 2020
Posted In IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 7, 2020 – September 11, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here. September 4, 2020: The IRS published Competent Authority Arrangements between the United States and the Republic of Serbia and the United States and the Commonwealth of the Bahamas. Each country previously signed an intergovernmental agreement (IGA) to implement the Foreign Account Tax Compliance Act (FATCA). The new arrangements establish procedures for IGA-related automatic exchange obligations and for the exchange of information. September 9, 2020: The IRS publishing news release reminding self-employed individuals, investors, retirees and others with income not subject to withholding that third-quarter estimated tax payments for 2020 are due September 15. September 9, 2020: The IRS...

Final Section 468A Regulations Issued at Last

By Martha Groves Pugh, Justin Jesse and Brian Moore on Sep 11, 2020
Posted In IRS Guidance, Tax Reform

On September 4, 2020, the Internal Revenue Service (IRS) and the US Department of the Treasury (Treasury) published in the Federal Register final regulations under section 468A of the Internal Revenue Code (the Code) that address three issues raised by the nuclear electric industry concerning qualified nuclear decommissioning funds ("qualified funds"). These final regulations conclude a many years-long regulation project to clarify the rules relating to decommissioning costs and self-dealing rules. McDermott submitted multiple sets of comments throughout the process, and Marty Pugh provided vital testimony during an IRS hearing on the proposed regulations. Access the full article here.

Taxation of Virtual Currency Mining Activities

By Andrea Kramer on Sep 11, 2020
Posted In IRS Guidance, Tax Reform

Proof of work (PoW)—one of the consensus methodologies through which blockchain (digital ledger) transactions can be validated—relies on data miners whose mining activities involve solving complex mathematical calculations. This article discusses key tax issues for miners and the IRS’s preliminary views involving taxation of Bitcoin PoW mining activities. Access the full article here.

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