Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 3, 2020 – August 7, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.
August 3, 2020: The IRS published a news release announcing that James Lee will become the new chief of IRS Criminal Investigation on October 1, 2020.
August 4, 2020: The IRS published a notice and request for comments concerning Form 3800 (General Business Credit), which is the form taxpayers file to claim any of the general business credits. Comments are due on or before October 5, 2020.
August 4, 2020: The IRS published corrections to final regulations under Treasury Decision 9896 that were published in the Federal Register on Wednesday, April 8, 2020. The final regulations provide guidance regarding hybrid dividends and certain amounts paid or accrued pursuant to hybrid arrangements, which generally involve arrangements whereby US and foreign tax law classify a transaction or entity differently for tax purposes. The corrections are effective on August 4, 2020.
August 4, 2020: The IRS added new content to Internal Revenue Manual 21.7.2 concerning a new major subsection with COVID-19 related employment tax relief guidance.
August 5, 2020: The IRS released public comments in response to Notice 2020-43, which requested comments on a proposed requirement for partnerships to use only one of two alternative methods (described in the notice) to satisfy the tax capital reporting requirement with respect to partnership taxable years that end on or after December 31, 2020. If adopted, partnerships and certain other persons would no longer be permitted to report partner capital accounts using any other method, including section 704(b) and US generally accepted accounting principles.
August 7, 2020: The IRS released Internal Revenue Bulletin 2020-33, dated August 10, 2020, containing the following: Announcement 2020-10, Announcement 2020-11; Revenue Procedure 2020-37; T.D. 9901, T.D. 9902; REG-127732-19.
August 7, 2020: The IRS announced corrections to Treasury Decision 9900, published in Internal Revenue Bulletin 2020-30 on Monday, July 20, 2020, regarding consolidated net operating loss deductions. The corrections revise the applicability date of the temporary regulations, revise the amended return filing date, and revise a specific regulation’s expiration date.
August 7, 2020: The IRS released for publication in the Federal Register final regulations under sections 162, 164, and 170 affecting taxpayers who make transfers to entities described in section 170(c) for business purposes and taxpayers who receive state or local tax credits in exchange for transfers to such entities or who receive other third party benefits in exchange for transfers to such entities. The final regulations: (1) update the regulations under section 162 to reflect current law regarding the application of section 162 to taxpayers that make payments or transfers for business purposes to entities described in section 170(c); (2) provide safe harbors under section 162 to provide certainty with respect to the treatment of payments made by business entities to entities described in section 170(c); (3) provide a safe harbor under section 164 for payments made to an entity described in section 170(c) by individuals who itemize deductions and receive or expect to receive a state or local tax credit in return; and (4) update the regulations under section 170 to reflect past guidance and case law regarding the application of the quid pro quo principle under section 170 to a donor who receives or expects to receive benefits from a third party. The final regulations are effective August 11, 2020.
August 7, 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 Robbie Alipour in our Chicago office for this week’s roundup.