Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 19, 2022 – December 23, 2022.
December 19, 2022: The IRS released Internal Revenue Bulletin 2022-51, which highlights the following:
- Revenue Ruling 2022-23: This revenue ruling announces the interest rates for the first quarter of 2023. The new interest rates are as follows:
- Overpayments: 7%
- Overpayments for corporations: 6%
- Corporate overpayments for portion exceeding $10,000: 4.5%
- Underpayments: 7%
- Large corporate underpayments: 9%
- Announcement 2022-26: This announcement notifies taxpayers that payments made to property owners under Suffolk County’s Septic Improvement Program are not required to be included in gross income for federal income tax purposes.
- Revenue Ruling 2022-24: This revenue ruling provides tables for covered compensation related to qualified pension, profit-sharing and stock bonus plans under Section 401(l)(5)(E) and related income tax regulations for the 2023 plan year. The taxable wage base is $160,200 for the 2023 tax year (up from $147,000 in 2022) for purposes of determining covered compensation.
- Announcement 2022-24: This announcement lists the organizations that no longer qualify for 501(c)(3) and 170(c)(2) status.
- Announcement 2022-25: This announcement notifies potential donors of a stipulated decision by the US Tax Court in declaratory judgment proceedings under Section 7428.
- Announcement 2022-27: This announcement reminds state and local housing credit agencies of the deadline related to certain allocation of housing credit dollar amounts under Section 42.
December 19, 2022: The IRS and the US Department of the Treasury (Treasury) issued guidance related to the Sustainable Aviation Fuel (SAF) credit. Notice 2023-06 explains the requirements for the fuel to be eligible for the SAF credit, how to claim the credit and who must be registered. The SAF credit was introduced in the Inflation Reduction Act of 2022 (IRA) and applies to a qualified fuel mixture containing sustainable aviation fuel for certain uses or sales in the 2023 and 2024 calendar years.
December 19, 2022: The Treasury announced a timeline for providing additional information on key tax provisions for the IRA. Before the end of the year, the Treasury will provide: (1) FAQs on the tax credit for energy-efficient home improvement projects and residential energy property; (2) initial guidance on the corporate alternative minimum tax; and (3) initial guidance on the excise tax on stock buybacks. Beginning January 1, 2023, consumers and businesses will be able to access tax benefits from many of the IRA’s climate provisions.
December 20, 2022: The IRS issued Notice 2023-4, which provides the percentage increase for calculating the qualifying payment amounts for items and services furnished during 2023 with respect to Sections 9816 and 9817 of the Internal Revenue Code, Sections 716 and 717 of the Employee Retirement Income Security Act of 1974, and Sections 2799A-1 and 2799A-2 of the Public Health Service Act.
December 20, 2022: The IRS released Notice 2023-8, which provides guidance for brokers to comply with the provisions of the final regulations under Section 1446(f) and certain provisions of the final regulations that apply to Section 1446(a) that relate to withholding on the transfer of an interest in a publicly traded partnership.
December 20, 2022: The Treasury Inspector General for Tax Administration (TIGTA) released a report, entitled, Backlogs of Tax Returns and Other Account Work Will Continue Into the 2023 Filing Season. The TIGTA report indicates that while the IRS has increased productivity in 2022, the backlog will continue into the 2023 filing season.
December 21, 2022: The IRS reminded people that low and moderate income workers can save for retirement now and possibly earn a special tax credit in 2022 and beyond. The retirement savings contributions credit helps offset part of the first $2,000 workers voluntarily contribute to 401(k) plans and similar workplace retirement programs. The credit also helps eligible people with a disability, who are designated beneficiaries of an Achieving a Better Life Experience account, contribute to that account.
December 22, 2022: The IRS released FAQs related to energy-efficient home improvements and the residential clean energy property credits. The information can be found in Fact Sheet FS-2022-40.
December 23, 2022: The IRS announced a delay in implementing the $600 reporting threshold for third-party settlement organizations. As a result, third-party organizations will not be required to report tax year 2022 transactions on Form 1099-K to the IRS or the payee for the lower $600 threshold amount. Notice 2023-10 describes the transition period, which is intended to facilitate an orderly transition for compliance.
December 23, 2022: The IRS released Announcement 2023-1, which notifies taxpayers of the applicable reference standard that must be used to determine the amount of the energy-efficient commercial building property deduction allowed under Section 179D, as amended by the IRA. This announcement identifies the existing reference standard, affirms a new reference standard and clarifies when each of the two reference standards will apply.
December 23, 2022: The IRS and the Treasury announced that brokers are not required to report additional information on the disposition of digital assets until final regulations under Sections 6045 and 6045A are issued. Announcement 2023-2 provides transitional guidance with respect to the reporting of information on digital assets.
December 23, 2022: The IRS announced that it finalized changes to Schedule UTP, Uncertain Tax Position Statement, and Instructions for Schedule UTP. The changes include removal of the requirement to identify nonprecedential and unpublished guidance, modified language in the instructions regarding what is needed for the concise description of the issue to focus more on the facts involved, and confirmation that the amount of any reserve need not be disclosed, but rather just the amount listed on the line to which the uncertain tax position relates. You can read more about our coverage on the changes here.
December 23, 2022: The IRS released Revenue Procedure 2023-10, which prescribes the loss payment patterns for the 2022 determination year and the discount factors for the 2022 accident year for insurance companies in computing discounted unpaid losses under Section 846 and
and discounted estimated salvage recoverable under Section 832.
December 23, 2022: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
- The IRS’s Electronic Tax Administration Advisory Committee will host a public meeting on January 11, 2023, at 12:30 pm (EST). The purpose of the committee is to provide feedback on how the IRS performs its duties electronically.
Special thanks to Sarah Raben in our Chicago office for this week’s roundup.