Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 25 – 29, 2019.
November 26, 2019: The IRS issued a News Release regarding a Revenue Procedure that updates the rules for using per diem rates to substantiate, under section 274 and Treas. Reg. § 1.274-5, the amount of ordinary and necessary business expenses paid or incurred while traveling away from home, including employees’ lodging, meals, and incidental expenses. The IRS noted that taxpayers are not required to use a method described in the Revenue Procedure and may instead substantiate actual allowable expenses provided they maintain adequate records.
November 26, 2019: The IRS released the Fall 2019 Statistics of Income Bulletin, which is issued quarterly by the Statistics of Income Division of the IRS and provides the most recent statistics available from tax and information returns filed by US taxpayers. The bulletin focused on high-income individual income tax return data from 2016, individual noncash charitable contributions from 2017, and partnership returns from 2017.
November 26, 2019: The IRS issued Interim Guidance under Internal Revenue Manual 4.31.9 that outlines field examination procedures for use by LB&I and SB/SE employees when auditing partnership returns under the centralized partnership audit regime. The guidance applies to partnerships for taxable years beginning after December 31, 2017, and partnerships that elect into the BBA regime for taxable years beginning after November 2, 2015, and before January 1, 2018.
November 26, 2019: The IRS issued Interim Guidance under Internal Revenue Manual 11.3.13 that provides guidance on processing FOIA requests for access to tax records protected by section 6103 where required identification or authorization has not been established by the requester. Effective immediately, such requests will be denied citing FOIA exemption (b)(3)/ section 6103 and appeal rights will be granted.
November 26, 2019: The IRS issued a News Release noting the approaching tax filing season and cautioning taxpayers not to rely on receiving refunds by a certain date. The IRS explained that though most refunds are issued in less than 21 days, various transactions—including year-end and holiday bonuses, stock dividends, capital gain distributions from mutual funds and stocks, bonds, virtual currency, and real estate sold at a profit—can delay a taxpayer’s refund.
November 29, 2019: The IRS released a Treasury Decision in which it announced a correcting amendment to final regulations and removal of temporary regulations (T.D. 9623) that were published in the Federal Register on July 3, 2013. The final regulations relate to the application of section 108(i) to partnerships and S corporations and provide guidance regarding the deferral of discharge of indebtedness income and original issue discount deductions by a partnership or an S corporation with respect to reacquisitions of applicable debt instruments after December 31, 2008 and before January 1, 2011. The amendment removes the sectional authority for Treas. Reg. § 1.108(i)-2T to read as follows: “Authority: 26 U.S.C. 7805, unless otherwise noted.”
November 29, 2019: The IRS released a notice that cancels a December 9, 2019, public hearing on proposed regulations under sections 1291, 1297, and 1298 regarding the determination of ownership in a passive foreign investment company within the meaning of section 1297(a) and the treatment of certain income received or accrued by a foreign corporation and assets held by a foreign corporation for purposes of section 1297.
November 29, 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 Jenni Saperstein in our Chicago office for this week’s roundup.