Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 26, 2022 – December 30, 2022.
December 26, 2022: The IRS released Internal Revenue Bulletin 2022-52, which highlights the following:
- Proposed Regulations 106134-22: These proposed regulations identify certain syndicated conservation easement (SCE) transactions and substantially similar transactions as “listed transactions,” which means they must be reported to the IRS.
- Revenue Procedure 2022-43: This procedure sets out the final qualified intermediary withholding agreement (QI agreement), which began on January 1, 2023. The QI agreement allows certain people to enter into an agreement with the IRS to simplify their obligations as withholding agents and as payors for amounts paid to their account holders and allows certain people to act as qualified derivatives dealers and assume primary withholding and reporting responsibilities on all dividend equivalent payments they make.
- Announcement 2022-28: This announcement is released in conjunction with the above proposed regulations that identify certain SCE transactions as “listed transactions.” The announcement explains that the regulations are being proposed in response to certain court decisions holding that the Administrative Procedure Act requires the IRS to identify listed transactions through notice-and-comment rulemaking and that the IRS plans to issue additional regulations related to other “listed transactions.”
- Notice 2022-61: This notice provides guidance on the prevailing wage and apprenticeship requirements, as amended by the Inflation Reduction Act of 2022 (IRA). This notice also serves as the published guidance establishing the 60-day period with respect to the applicability of the prevailing wage and apprenticeship requirements.
- Proposed Regulations 113839-22: This document contains proposed regulations that treat members of a consolidated group as a single US shareholder in certain cases for purposes of Section 951(a)(2)(B). The proposed regulations affect consolidated groups that own stock of foreign corporations.
- Revenue Procedure 2022-42: This procedure provides guidance on new rules added as part of the IRA on how to enter into a written agreement with the IRS to provide periodic written reports containing specified information related to a clean vehicle manufactured. It also provides the procedures for people selling vehicles to report information to the IRS in order for the vehicle to be eligible for the credit.
December 27, 2022: The IRS and the US Department of the Treasury (Treasury) announced interim guidance on the corporate stock repurchase excise tax. Notice 2023-2 provides the interim guidance on the new 1% excise tax on a covered corporation’s repurchases of corporate stock under Section 4501. (Section 4501 was added as part of the IRA.) The notice provides an exclusive list of Section 317(b) redemption transactions that are treated as Section 317(b) redemption but are not repurchases, as well as an exclusive list of transitions that are economically similar transactions. The notice applies to stock repurchases and issuances of stock made after December 31, 2022.
December 27, 2022: The IRS announced that it has issued interim guidance on the new corporate alternative minimum tax (CAMT). The CAMT imposes a 15% minimum tax on the adjusted financial statement income of large corporations for taxable years beginning after December 31, 2022. Notice 2023-7 clarifies which corporations the CAMT applies to and how the alternative minimum tax is calculated.
December 29, 2022: The IRS issued proposed regulations regarding the treatment of qualified foreign pension funds for purposes of the exemption from taxation afforded to foreign governments. The proposed regulations also address the determination of whether a qualified investment entity is domestically controlled, including the treatment of qualified foreign pension funds.
December 29, 2022: The IRS published final regulations regarding gain or loss of a qualified foreign pension fund attributable to certain interests in US real property. The final regulations also include rules for certifying that a qualified foreign pension fund is not subject to withholding on certain dispositions of, and distributions with respect to, certain interests in US real property.
December 29, 2022: The IRS and the Treasury announced guidance related to the new clean vehicle credit. Notice 2023-1 informs taxpayers that the Treasury and the IRS intend to propose regulations addressing the definitions of certain terms in Section 30D.
December 29, 2022: The IRS and the Treasury announced guidance on the incremental cost for the Commercial Clean Vehicle Credit. Notice 2023-9 informs taxpayers that the Treasury and the IRS have reviewed the incremental cost for all street vehicles in calendar year 2023, and the analysis shows that the incremental cost of all street vehicles—other than in the case of compact car plug-in hybrid electric vehicles—that have a gross vehicle weight rating of less than 14,000 pounds will be greater than $7,500 in calendar year 2023.
December 29, 2022: The IRS announced the 2023 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning January 1, 2023, the standard mileage rates for the use of a car, van, pickup or panel truck will be:
- 5 cents per mile driven for business use
- 22 cents per mile driven for medical or moving purposes for qualified active duty members of the armed forces
- 14 cents per mile driven in service of charitable organizations
These rates apply to gasoline, diesel-powered, electric and hybrid-electric vehicles. The optional standard mileage rates are contained in Notice 2023-03.
December 29, 2022: The IRS and the Treasury issued Revenue Procedure 2023-11, providing updated guidelines for accounting method changes for specified research or experimental expenditures. The new guidance modifies and supersedes Revenue Procedure 2023-8 and is designed to encourage timely compliance with changes made by the Tax Cuts and Jobs Act of 2017.
December 30, 2022: The IRS released Notice 2023-11, which provides temporary relief to certain foreign financial institutions (FFIs) that have been unable to obtain US taxpayer identification numbers (TINs) for their preexisting accounts that are US reportable accounts. As part of the relief, the FFIs will provide information that the IRS can analyze to determine why these TINs are missing.
December 30, 2022: The IRS and the Treasury issued proposed regulations that provide an alternative to in-person witnessing of spousal consents required to be witnessed by a notary public or a plan representative and also clarify that certain special rules for the use of an electronic medium for participant elections also apply to spousal consents.
December 30, 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.