Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 25, 2022 – July 29, 2022. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.
July 25, 2022: The IRS released Internal Revenue Bulletin 2022-30, which highlights the following:
- Employee Plans: Revenue Ruling 2022-13 addresses the application of section 432(b)(7) in the case of a merger of a multiemployer defined benefit pension plan that receives special financial assistance (SFA) from the Pension Benefit Guaranty Corporation into a multiemployer defined benefit pension plan that does not receive SFA.
- Estate Tax: Revenue Procedure 2022-32 provides a simplified method for certain estates to receive a time extension for filing a return before the fifth anniversary of the decedent’s death to elect portability of the deceased spousal unused exclusion amount. This revenue procedure applies to estates that are not normally required to file an estate tax return because the value falls under the filing threshold.
- Income Tax: REG 130675-17 includes proposed regulations that define the term “foreign currency contract” to include only foreign currency forward contracts.
July 25, 2022: The Treasury Inspector General for Tax Administration (TIGTA) released its report, American Rescue Plan Act: Assessment of the Child Tax Credit Update Portal’s Capabilities and Related Processes. In January, TIGTA made recommendations to the IRS for improving and correcting the Child Tax Credit website. TIGTA also recommended that the IRS develop a reconciliation process for undeliverable checks. This report confirms that the IRS followed and implemented both recommendations.
July 25, 2022: The IRS asked for comments on Form 6781, Gains and Losses from Section 1256 Contracts and Straddles, which is used to calculate gains and losses from section 1256 contracts and straddles.
July 25, 2022: The IRS provided a status update on the Income Verification Express Service (IVES) program. During the third week of July, IVES processed Acknowledgments for requests dated through July 6, 2022, and Transcripts/Rejection Notices for requests dated through June 27, 2022. The IRS also reminded IVES participants that starting August 16, 2022, only the new coversheet from January 1, 2022, will be accepted.
July 25, 2022: The IRS released Tax Tip 2022-112, reminding people with disabilities to use the “Achieving a Better Life Experience” account to help pay qualified disability-related expenses. The tax-advantaged savings account does not affect their eligibility for government assistance programs.
July 26, 2022: The IRS released Tax Tip 2022-113, promoting its IRS2Go app to help people find IRS tools and resources faster and with less scrolling. The IRS2Go app works on mobile devices to check refund statuses and find tax help.
July 26, 2022: The IRS announced a warning for tax professionals that email and cloud-based schemes continue to evolve in an effort to steal taxpayer data. This topic is the second of a five-part series from the Security Summit, which includes the IRS, state tax agencies and others from the tax community. The IRS also references IRS Publication 4557, Safeguarding Taxpayer Data to help tax professionals safeguard taxpayer information.
July 27, 2022: The IRS released a statement on balance due notices. The statement clarifies that the IRS is aware that some payments made for 2021 tax returns have not been applied correctly to joint taxpayer accounts. In such cases, the taxpayers are receiving erroneous balance due notices (CP-14 Notices) or notices showing the incorrect amount. Taxpayers who received a notice but have already paid in full and on time do not need to respond to the notice. The IRS will provide an update after researching the matter.
July 27, 2022: The IRS released Tax Tip 2022-114, reminding taxpayers that, generally, the IRS will mail a notice or letter first before they call.
July 28, 2022: The IRS issued IRS Tax Tip 2022-115, urging taxpayers to visit IRS.gov before calling so that they know the correct information needed to verify their identity. The Let Us Help You page also provides answers to tax questions.
July 28, 2022: The IRS released its latest executive column, “A Closer Look.” The article, “Modernizing Tax Processing Systems,” features IRS Chief Information Officer Nancy Sieger and discusses one of the most complex modernization programs in the federal government, Customer Account Data Engine 2, and the importance of funding it.
July 29, 2022: The IRS issued Revenue Procedure 2022-34, which updates the applicable percentage table used to calculate an individual’s premium tax credit beginning in calendar year 2023 and updates the required contribution percentage for plan years beginning after calendar year 2022.
July 29, 2022: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Upcoming Events: The IRS will host a free webinar on August 4, 2022, entitled Understanding Form 1042 – Annual Withholding Tax Return for U.S. Source Income of Foreign Persons. The program will last two hours, starting at 1:00 pm CDT. Tax professionals who attend can earn up to two continuing education credits in Federal Tax.
Special thanks to Sarah Raben in our Chicago office for this week’s roundup.