Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 18 – 22, 2019.

November 19, 2019: The IRS published final regulations that affect United States persons with direct or indirect ownership interests in certain foreign corporations. The regulations provide rules regarding the attribution of ownership of stock or other interests for purposes of determining whether a person is a related person with respect to a controlled foreign corporation under section 954(d)(3). In addition, the final regulations provide rules for determining whether a controlled foreign corporation is considered to derive rents in the active conduct of a trade or business for purposes of computing foreign personal holding company income.

November 19, 2019: The IRS posted Large Business and International active compliance campaigns. The campaigns include: (1) Costs that Facilitate an IRC 355 Transaction; (2) Form 1120-F Delinquent Returns Campaign; (3) IRC 199 – Claims Risk Review; (4) IRC 457A – Deferred Compensation Attributable; (5) Nonresident Alien Individual (NRA) Tax Credits; and (6) Post Offshore Voluntary Disclosure Program (OVDP) Compliance.

November 19, 2019: The IRS added section 7122-related (offers in compromise) questions and answers on whether Form 8821 allows a taxpayer to appoint a third party to represent them before the IRS on an offer in compromise (negative) and on whether a spouse’s income must be included on Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, even if the spouse doesn’t owe taxes (affirmative).

November 19, 2019: The IRS issued interim guidance to update the process by which the IRS accepts requests for confirmation that the government received a filed FinCEN Form 114 (formerly TD F 90-22.1), Report of Foreign Bank and Financial Accounts (FBAR). The IRS will no longer accept verbal verification requests. All requests must be submitted in writing.

November 20, 2019: The IRS issued a news release on its annual report for 2019, including recommendations to the IRS on new and continuing issues in tax administration. The 2019 Public Report includes recommendations on over 20 issues, which cover a broad range of topics and concerns, including guidance relating to the Tax Cuts and Jobs Act.

November 20, 2019: The IRS published questions and answers about the new qualified business income deduction (the section 199A deduction) that may be available to individuals, including many owners of sole proprietorships, partnerships and S corporations, and some trusts and estates. This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20% of their qualified business income, plus 20% of qualified real estate investment trust dividends and qualified publicly traded partnership income.

November 21, 2019: The IRS’s National Taxpayer Advocate blog posted highlights of the Taxpayer First Act and its impact on the Taxpayer Advocate Service and taxpayer rights.

November 21, 2019: The IRS published a notice of public hearing on proposed regulations regarding the timing of income inclusion under section 451.  The public hearing is being [...]

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Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 15 – 19, 2019.

July 16, 2019: The IRS issued a news release concerning its provision of additional information to help taxpayers meet their filing and payment requirements for the Section 965 transition tax on untaxed foreign earnings. The IRS released this information in a question and answer format that addresses certain general issues that are not specific to the filing of a 2017 or 2018 tax return. The issues addressed include how to make subsequent installment payments when the transition tax is paid over eight years. The Q&As also address the filing of Transfer Agreements and Consent Agreements. For further information on this release, see our discussion here.

July 17, 2019: The IRS issued a revenue ruling in which it released the prescribed rates for federal income tax purposes for August 2019, including the applicable federal rates (AFR) under tax code Section 1274(d); the adjusted applicable federal rates (adjusted AFR) under Section 1288(b); the adjusted federal long-term rate and the long-term tax-exempt rate under Section 382(f); the appropriate percentages for determining the low-income housing credit under Section 42(b)(1); and the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest under Section 7520.

July 18, 2019: The IRS released a publication illustrating the stages of a taxpayer’s journey, from getting answers to tax law questions, all the way through the processes for audits, appeals, collection and litigation. The Taxpayer Advocate Services created the road map to help taxpayers navigate “the road to compliance.”

July 19, 2019: The IRS Large Business and International division (LB&I) issued an announcement that it had approved six additional compliance campaigns. Those compliance campaigns consist of the following: S Corporations Built-in Gains Tax; Post OVDP Compliance; Expatriation; High Income Non-filer; US Territories – Erroneous Refundable Credits; and Section 457A Deferred Compensation Attributable to Services Performed before January 1, 2009. We will separately post on these new campaigns. For a list of prior campaigns, see here.

July 19, 2019: The IRS issued a T.D. in which it issued rules for the process by which social welfare organizations must notify IRS of their intent to operate as tax-exempt organizations and in which it described those procedures the IRS issued for submitting form for notification.  The rules follow the issuance of Notice 2016-9, which provided guidance for submitting notification to the IRS of a social welfare organization’s intent to operate under tax code Section 501(c)(4), as required by Section 506. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) (Pub. L. No. 114-113, Div. Q, §405) created this notification requirement by adding Section 506. According to the regulations, Form 8976, Notice of Intent to Operate Under Section 501(c)(4), must be submitted to the IRS no later than 60 days after [...]

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