Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 2 – 6, 2019.
September 3, 2019: The IRS issued a notice in which it released the applicable amount for the health care annual fee imposed on covered entities for 2020. That amount is $15,522,820,037. The applicable amount is determined by multiplying the fee for the 2018 base year ($14,300,000,000) by premium adjustment percentage for 2020 (1.0855118907) and rounded to the nearest dollar, the IRS stated. The fee will apply in 2020 unless legislation extends the fee suspension in place for 2019.
September 3, 2019: The IRS issued two treasury decisions, here and here, which each contain corrections to final regulations regarding the designation and authority of the partnership representative under the centralized partnership audit regime.
September 5, 2019: The IRS issued a proposed regulation in which it introduced proposed rules that would provide guidance on the timing of income inclusion under tax code Section 451 of advance payments for goods, services, and other items. The proposed regulations would provide both a deferral method of accounting for taxpayers that do not have an applicable financial statement (AFS), in addition to taxpayers that have an AFS. The proposed regulations would provide a definition of advance payment, and advance payment acceleration provisions. The proposed regulations, however, would not provide an accelerated cost offset, as suggested in some comments.
September 5, 2019: The IRS issued a proposed regulation in which it introduced proposed rules regarding the timing of income inclusion under tax code Section 451. The proposed rules would provide that the AFS income inclusion rule generally applies to accrual method taxpayers with an AFS when the timing of income inclusion for one or more items of income is determined using the all events test. The AFS must cover the entire year, the IRS noted. The proposed regulations would define what is an AFS.
September 6, 2019: The IRS issued a proposed regulation in which it introduced proposed rules that would update information reporting regulations under tax code Section 6033 that are generally applicable to organizations exempt from tax under Section 501(a) to reflect statutory amendments and reporting relief announced through IRS guidance that have been made since the current regulations were adopted, particularly with respect to tax-exempt organizations required to file an annual Form 990 or 990-EZ. Specifically, the proposed regulations would include adding items in Section 6033(b)(10) and Section 6033(b)(11) to the list of items required to be reported, adding more statutory reporting requirements for controlling organizations, sponsoring organizations, and supporting organizations, amending the gross receipts threshold, clarification on Section 527 organizations, and requiring only Section 501(c)(3) and Section 527 organizations to continue providing names and addresses of contributors.
September 6, 2019: The IRS issued a revenue procedure to comply with proposed regulations (REG-104870-18 and REG-104554-18), affecting Treasury Regulations Section 1.451-3 and Regulations Section 1.451-8. The revenue procedure serves to modify the procedure to obtain automatic consent to change methods of accounting. The modifications affect accrual method taxpayers with an applicable financial statement and provided changes related to specified credit card fees.
September 6, 2019: The IRS issued a notice in which it provided penalty relief to taxpayers relying on Revenue Procedure 2018-38, which provided information reporting relief to exempt organization under tax code Section 501(a) that are required to file an annual Form 990, Return of Organization Exempt From Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt From Income Tax. The IRS provided that it will not impose a penalty under Section 6652(c) for a taxable year ending on or after December 31, 2018, and on or prior to July 30, 2019.
September 6, 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.