Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of February 24 – 28, 2020.
February 24, 2020: The IRS released final instructions to Form 8978, Partner’s Additional Reporting Year Tax, to reflect changes to the audit procedures of partnerships under the 2015 BBA. Under IRC section 6226, a partnership may elect to have each reviewed year partner take into account the partner’s share of the partnership’s adjustments, instead of the partnership paying the imputed underpayment determined under Section 6221.
February 24, 2020: The IRS issued a news release naming Brendan O’Dell, a senior advisor in the IRS LB&I Division, as the IRS’ new Promoter Investigations Coordinator. O’Dell will coordinate promoter activity across the agency, working with the IRS business units, the Office of Professional Responsibility, Criminal Investigation, Chief Counsel and other IRS offices to ensure coordination of ongoing investigations and the development of new approaches to identify promoters of aggressive tax arrangements.
February 27, 2020: The IRS issued final regulations that correct TD 9885, the base erosion and anti-abuse regulations that were published on December 6, 2019. The corrections clarify two-timing thresholds, stating that the final regulations extend the transition period for meeting the complete QDP reporting requirements until taxable years beginning on or after Monday, June 7, 2021 and that Section 1.6038A-2(b)(7)(ix) applies to taxable years beginning on or after Monday, June 7, 2021.
February 27, 2020: The IRS updated Publication 590-A, which addresses contributions to individual retirement arrangements (IRAs) under IRC section 408A. The IRS provided the correct procedure to determine modified adjusted gross income for Roth IRA purposes.
February 27, 2020: The Treasury and the IRS announced the appointment of Erin M. Collins as the new National Taxpayer Advocate. For our separate discussion of the appointment, as well as other recent tax appointments, see here.
February 28, 2020: The Statistics of Income (SOI) Division of the IRS released the SOI Bulletin for winter 2020. The bulletin focuses on individual foreign-earned income and the foreign tax credit for the 2016 tax year, when the total amount of foreign-earned income reported by US taxpayers decreased by 11.2% from 2011, while the foreign-source gross income reported by US taxpayers during that time increased by 19.5%. The SOI Bulletin provides the most recent data available from various tax and information returns filed by US taxpayers.
February 28, 2020: The IRS released a revenue ruling and a related news release announcing that interest rates under IRC section 6621 will remain the same for the calendar quarter beginning April 1, 2020. IRC section 6621 establishes the interest rates on overpayments and underpayments of tax, including a specific rate for large corporate underpayments. The revenue ruling will appear in the Internal Revenue Bulletin 2020-12, dated March 16, 2020.
February 28, 2020: 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.