Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 19 – 23, 2019.
August 20, 2019: The IRS released a proposed regulation that provides corrections to proposed rules that would provide an exception to the unified plan rule for defined contribution multiple employer plans where the employer fails to satisfy qualification requirement or to provide information to determine compliance.
August 22, 2019: The IRS released a proposed regulation that provides special valuation rules for employers and employees to use in determining the amount to include in an employee’s gross income for personal use of an employer-provided vehicle. Notice 2019-08 was issued to implement amendments made to tax code Section 280F, by the 2017 tax act, Pub. L. No. 115-97. In an effort to be consistent with the substantial increase in the dollar limitation on depreciation deductions under Section 280F(a), the proposed regulations would increase, effective for the 2018 calendar year, the maximum base fair market value of a vehicle for use of the fleet-average or vehicle cents-per-mile valuation rule to $50,000. The IRS also stated that to comply with Notice 2019-34, it expects that the inflation-adjusted maximum fair market value for a vehicle for purposes of the fleet-average and vehicle cents-per-mile valuation rules will be included in an annual notice.
August 22, 2019: The IRS issued a notice in which it stated that forthcoming regulations will provide that a domestic partnership or S corporation may apply the rules in Proposed Treasury Regulations Section 1.951A-5, in their entirety, for taxable years that ended before June 22, 2019. The IRS also stated in its notice that a domestic partnership or S corporation will not be liable for penalties for failures under tax code Section 6698, Section 6699, Section 6722, or similar provisions because of a failure to act consistently with Proposed Treasury Regulations Section 1.951A-5 before June 22, 2019. However, to qualify for relief, the domestic partnership or S corporation must provide notice to each partner or shareholder.
August 22, 2019: The IRS released a Treasury Decision in which it released corrections to T.D. 9866, containing final regulations on determining the amount of global intangible low-taxed income (GILTI) included in the gross income of certain US shareholders of foreign corporations, including US shareholders that are members of a consolidated group.
August 23, 2019: The IRS issued a notice in which it stated that the nondiscrimination relief for closed defined benefit plans provided for in Notice 2014-5 is extended to plan years beginning before 2021 if certain conditions outlined in its Notice 2019-49 are satisfied. Notice 2014-5 permits a DB/DC plan that includes a closed defined benefit plan and that satisfies certain conditions set forth in the notice to demonstrate satisfaction of the nondiscrimination in amount requirement of Treasury Regulations Section 1.401(a)(4)-1(b)(2) on the basis of equivalent benefits even if the DB/DC plan does not meet any of the existing eligibility conditions for testing on that basis under Treasury Regulations Section 1.401(a)(4)-9(b)(2)(v). The IRS extended the relief based on the anticipation of final regulations under tax code Section 401(a)(4).
August 23, 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.