Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 15 – 19, 2019.
July 16, 2019: The IRS issued a news release concerning its provision of additional information to help taxpayers meet their filing and payment requirements for the Section 965 transition tax on untaxed foreign earnings. The IRS released this information in a question and answer format that addresses certain general issues that are not specific to the filing of a 2017 or 2018 tax return. The issues addressed include how to make subsequent installment payments when the transition tax is paid over eight years. The Q&As also address the filing of Transfer Agreements and Consent Agreements. For further information on this release, see our discussion here.
July 17, 2019: The IRS issued a revenue ruling in which it released the prescribed rates for federal income tax purposes for August 2019, including the applicable federal rates (AFR) under tax code Section 1274(d); the adjusted applicable federal rates (adjusted AFR) under Section 1288(b); the adjusted federal long-term rate and the long-term tax-exempt rate under Section 382(f); the appropriate percentages for determining the low-income housing credit under Section 42(b)(1); and the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest under Section 7520.
July 18, 2019: The IRS released a publication illustrating the stages of a taxpayer’s journey, from getting answers to tax law questions, all the way through the processes for audits, appeals, collection and litigation. The Taxpayer Advocate Services created the road map to help taxpayers navigate “the road to compliance.”
July 19, 2019: The IRS Large Business and International division (LB&I) issued an announcement that it had approved six additional compliance campaigns. Those compliance campaigns consist of the following: S Corporations Built-in Gains Tax; Post OVDP Compliance; Expatriation; High Income Non-filer; US Territories – Erroneous Refundable Credits; and Section 457A Deferred Compensation Attributable to Services Performed before January 1, 2009. We will separately post on these new campaigns. For a list of prior campaigns, see here.
July 19, 2019: The IRS issued a T.D. in which it issued rules for the process by which social welfare organizations must notify IRS of their intent to operate as tax-exempt organizations and in which it described those procedures the IRS issued for submitting form for notification. The rules follow the issuance of Notice 2016-9, which provided guidance for submitting notification to the IRS of a social welfare organization’s intent to operate under tax code Section 501(c)(4), as required by Section 506. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) (Pub. L. No. 114-113, Div. Q, §405) created this notification requirement by adding Section 506. According to the regulations, Form 8976, Notice of Intent to Operate Under Section 501(c)(4), must be submitted to the IRS no later than 60 days after the date the organization is organized.
July 19, 2019: The IRS issued final regulations in which it released guidance concerning the income inclusion rules under tax code Section 50(d)(5) that are applicable to a lessee of investment credit property when a lessor of such property elects to treat the lessee as having acquired the property. The rules also coordinate the Section 50(a) recapture rules with the Section 50(d)(5) income inclusion rules. The final regulations also provide rules regarding income inclusion upon a lease termination, lease disposition by a lessee, or disposition of a partner’s or S corporation shareholder’s entire interest in a lessee partnership or S corporation outside of the recapture period.
July 19, 2019: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Alex Ruff in our Chicago office for this week’s roundup.