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Weekly IRS Roundup December 20 – December 24, 2021

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 20, 2021 – December 24, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

December 20, 2021: The IRS published a news release announcing that victims of this month’s tornadoes in parts of Illinois and Tennessee will have until May 16, 2022, to file various individual and business tax returns and make tax payments.

December 20, 2021: The IRS released instructions for Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), to reflect a new separate Schedule A and eliminate the requirement for domestic partnerships to file the form.

December 20, 2021: The IRS released Publication 17, Your Federal Income Tax (for Individuals), which was updated for the 2021 tax year. This publication covers the general rules for filing a federal income tax return and supplements the information contained in tax form instructions.

December 21, 2021: The IRS released a memorandum that reissues interim guidance AP-08-0521-0015 concerning procedures for accepting images of signatures and digital signatures and approval to receive documents by email and transmit documents to taxpayers. The memorandum is in response to the COVID-19 pandemic, where the IRS took several steps to protect employees while still delivering on their mission-critical functions.

December 21, 2021: The IRS released Published 15, (Circular E), Employer’s Tax Guide, which explains tax responsibilities as an employer. The updates reflect COVID-19 related employment tax credits and other tax relief.

December 22, 2021: The IRS published a news release announcing that victims of Hurricane Ida in six states now have until February 15, 2022 (extended from January 3), to file various individual and business tax returns and make tax payments. The updated relief covers the entire states of Louisiana and Mississippi, as well as parts of New York, New Jersey, Connecticut and Pennsylvania.

December 23, 2021: 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.




Weekly IRS Roundup December 13 – December 17, 2021

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 13, 2021 – December 17, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

December 13, 2021: The IRS published a memorandum concerning its commitment to creating an environment conducive to civility, which includes mutual respect, politeness and fairness. The IRS stated that acting with civility and treating others with respect furthers confidence in the legal system, thus enhancing the quality of justice. The memorandum also stated that the IRS’s sole objective is to reach the correct result.

December 13, 2021: The IRS issued a news release announcing that it joined with several leading nonprofits to highlight a special tax provision that allows more people to deduct donations to qualifying charities on their 2021 federal income tax return.

December 14, 2021: The IRS released a practice unit, providing an overview of base erosion anti-abuse tax under Section 59A after issuance of final regulatory packages in 2019 and 2020.

December 14, 2021: The IRS released a practice unit, addressing the general process for determining if a nonresident alien (NRA) student, trainee, teacher or researcher is eligible to claim a treaty-based exemption on Form 1040NR or Form 1040NR-EZ for income received that is effectively connected with a US trade or business.

December 14, 2021: The IRS released a practice unit, guiding examiners through the procedures for properly conducting promoter investigations. The goal of a promoter investigation is to identify and quickly terminate the abusive promotion or activity, assert promoter penalties where applicable and identify participants in the abusive transaction.

December 14, 2021: The IRS released a practice unit, reflecting the recently finalized Treasury Regulation 1.861-9 (regarding interest expense apportionment) and addressing the impact of flow-through entities on the foreign tax credit. The concept unit is applicable to individual taxpayers who receive Schedule K-1(s) from partnerships or S corporations that report foreign income, related deductions and taxes. Members of limited liability companies who file a Form 1065 and beneficiaries of a trust who file a Form 1041 are also subject to the rules discussed in the practice unit.

December 14, 2021: The IRS released a practice unit, explaining the process for calculating the interest due under Section 453A on a deferred tax liability in installment sales transactions.

December 14, 2021: The IRS published a news release announcing that victims of tornadoes in Kentucky will have until May 16, 2022, to file various individual and business tax returns and make tax payments.

December 14, 2021: The IRS published a revenue ruling, providing various prescribed rates for federal income tax purposes for January 2022.

December 15, 2021: The IRS published a notice concerning procedures under Section 446 of Section 1.446-1(e) of the Income [...]

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Omitted Subpart F and GILTI Income May Be a Statute of Limitations Trap for the Unwary

Taxpayers large and small desire closure with respect to tax reporting positions. This can occur in several ways, one of which is the closing of the limitations period for assessing additional tax. In this article published in the November-December 2021 issue of the International Tax Journal, McDermott Partners Andrew R. Roberson and Kevin Spencer discuss recent Internal Revenue Service (IRS) guidance relating to the limitations period for omitted Subpart F income.

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Weekly IRS Roundup December 6 – December 10, 2021

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 6, 2021 – December 10, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

December 6, 2021: The IRS published updated guidance on requesting estate tax closing letters and transcript request procedures.

December 6, 2021: The US Treasury Inspector General for Tax Administration (TIGTA) released a semiannual report to US Congress, summarizing the accomplishments of the TIGTA from April 1, 2021, through September 30, 2021. The TIGTA’s Office of Audit completed 52 audits, and its Office of Investigations completed 1,430 investigations. Its combined audit and investigative efforts resulted in the recovery, protection and identification of monetary benefits totaling more than $9 billion.

December 6, 2021: The IRS issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. The Infrastructure Investment and Jobs Act, which was enacted on November 15, 2021, amended the law so that the Employee Retention Credit applies only to wages paid before October 1, 2021 (unless the employer is a recovery startup business).

December 7, 2021: The IRS published a news release encouraging taxpayers to take important actions this month to help them file their federal tax returns in 2022, including special steps related to Economic Impact Payments and advance Child Tax Credit payments. A special page, updated and available on IRS.gov, outlines the steps taxpayers can take now to make tax filing easier next year.

December 7, 2021: The IRS published frequently asked questions (FAQs), providing guidance on what certain pass-through businesses should do in the absence of updated forms for the 2021 tax year. The tax year 2021 forms, to which Schedules K-2 and K-3 must be attached, have not yet been finalized. The FAQs address questions concerning whether Schedules K-2 and K-3 must be attached to tax year 2020 forms for partnerships or S corporations with 2021 short tax years or, in the case of Form 8865, filers of Form 8865 with 2021 short tax years.

December 7, 2021: The IRS published a memorandum providing interim guidance for in-person conference procedures. The guidance provides that the IRS Independent Office of Appeals (IRS Appeals) will use its best efforts to schedule the in-person conference at a location that is reasonably convenient for both the taxpayer and the IRS Appeals. This guidance does not modify any temporary procedures in place due to COVID-19.

December 8, 2021: The IRS released guidance for IRS Appeals employees working Tax-Exempt/Government Entities (TE/GE)-sourced cases. For TE/GE-sourced cases in which a taxpayer or representative raises a new issue, provides new information or advances a new theory or an alternative legal argument to the IRS Appeals, the IRS Appeals employee is required to follow the instructions provided by the IRS.

December 10, 2021: The [...]

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Weekly IRS Roundup November 29 – December 3, 2021

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 29, 2021 – December 3, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

November 29, 2021: The IRS published a news release warning taxpayers and tax professionals to beware of a dangerous combination of events that can increase their exposure to tax scams and identity theft. The IRS stated that the holiday shopping season, the upcoming tax season and the pandemic all create additional opportunities for criminals to steal sensitive personal or finance information.

November 30, 2021: The IRS issued Revenue Procedure 2021-53, which provides temporary guidance regarding the treatment of certain stock distributions by publicly offered real estate investment trusts and publicly offered regulated investment companies in recognition of the need for liquidity as a result of COVID-19. The guidance reduces the minimum required aggregate amount of cash that distributee shareholders may receive to no less than 10% of the total distribution in order for Section 301 (by reason of Section 305(b)) to apply to such distribution.

November 30, 2021: The IRS published a news release warning taxpayers to be wary of fake charities used by scammers to trick unsuspecting donors into providing money and sensitive financial and personal information.

November 30, 2021: The IRS posted an issue snapshot concerning issue indicators and audit tips for public and tax-exempt employer contributions to eligible deferred compensation plans (as defined in Section 457(b)).

December 1, 2021: The US Competent Authority posted the arrangement between Competent Authorities of the United States and Turkey, setting forth parameters on the exchange of county-by-country reporting agreements to combat transfer pricing, base erosion and profit shifting-related risks.

December 1, 2021: The IRS published a news release reminding taxpayers they can get extra protection starting in January by joining its Identity Protection Personal Identification Number (IP PIN) program. Anyone who can verify their identity can protect themselves against tax-related identity theft by opting into the program.

December 2, 2021: The IRS published a news release warning tax professionals that they face additional security risks from cybercriminals seeking to use the pandemic and phishing scams to steal sensitive client information.

December 2, 2021: The IRS recommended nonacquiescence in Mayo Clinic v. United States, 997 F.3d 789 (8th Cir. May 13, 2021), rev’g 412 F. Supp. 3d 1038 (D. Minn. 2019), where the appeals court invalidated Treasury Regulations Section 1.170A-9(c)(1)’s requirement that the primary function of an educational organization described in Section 170(b)(1)(A)(ii) be the presentation of formal instruction. For more background, see our recent post.

December 2, 2021: The IRS published a news release reminding tax professionals and taxpayers that they can use digital signatures on a variety of common IRS forms and access a [...]

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Weekly IRS Roundup November 22 – November 26, 2021

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 22, 2021 – November 26, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

November 22, 2021: The IRS released a memorandum concerning a temporary deviation from the handwritten signature requirement for certain tax forms. To alleviate COVID-19 concerns while promoting timely filing, the IRS will allow taxpayers and representatives to use electronic or digital signatures when signing listed forms that currently require a handwritten signature. No specific technology is required to create the signature. The IRS has listed the eligible forms, which must be postmarked on August 28, 2020, or later.

November 22, 2021: The IRS released a memorandum extending through October 31, 2023, temporary deviations that allow IRS employees to: (1) accept images of signatures and digital signatures on documents related to the determination or collection of tax liability and (2) send or receive documents to or from taxpayers using emails with encrypted attachments when no other approved electronic alternative is available.

November 22, 2021: The IRS released a memorandum providing guidance concerning employee retention credits and the deferral of paying social security taxes in 2020.

November 23, 2021: The IRS published a news release announcing the launch of a new Spanish-language version of the Child Tax Credit Update Portal (CTC-UP). Families who are already receiving monthly payments use the CTC-UP to update their accounts. Now, all the features that have only been available in English are also available in Spanish.

November 26, 2021: The IRS published a notice and request for comments on Form 944, Employer’s Annual Employment Tax Return, and Form 944-X, Adjusted Employer’s Annual Federal Tax Return or Claim for Refund, which are used in part to ensure the smallest non-agricultural and non-household employers are paying the correct amount of social security tax, Medicare tax and withheld federal income tax. Comments are due on or before January 25, 2022.

November 26, 2021: The IRS published a notice and request for comments concerning TD 8857 (addressing the determination of underwriting income by non-life insurance companies), which allows a non-life insurance company to increase unpaid losses on a yearly basis by the amount of estimated salvage recoverable if the company discloses this to the state insurance regulatory authority. Comments are due on or before January 28, 2022.

November 26, 2021: 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.




Weekly IRS Roundup November 15 – November 19, 2021

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 15, 2021 – November 19, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

November 15, 2021: The IRS published a news release announcing the launch of a new online tool designed to help US withholding agents comply with their reporting and withholding responsibilities with respect to IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. The tool performs a quality review of data before submitting to the IRS. Use of the tool does not change a withholding agent’s obligations to file Form 1042-S with the IRS and furnish a copy to the payee.

November 15, 2021: The IRS published a news release announcing that victims of wildfires that began July 14, 2021, now have until January 3, 2022, to file various individual and business tax returns and make tax payments.

November 16, 2021: The IRS published a news release announcing that, effective November 15, 2021, tax professionals are able to order up to 30 Transcript Delivery System transcripts per client through the Practitioner Priority Service line. This is an increase from the previous 10 transcripts per client limit.

November 16, 2021: The IRS published a news release regarding Notice 2021-63, which details how the temporary 100% business deduction for food or beverages from restaurants applies to taxpayers properly applying the rules of Revenue Procedure 2019-48 when using per diem rates.

November 17, 2021: The IRS published a news release announcing that victims of Hurricane Ida throughout Mississippi now have additional time—until January 3, 2022—to file various individual and business tax returns and make tax payments.

November 17, 2021: The Internal Revenue Service Advisory Council (IRSAC) published a news release announcing its annual report for 2021, which includes recommendations to the IRS regarding new and continuing issues in tax administration. The 2021 report includes recommendations on 24 issues, covering a broad range of topics. The IRSAC is a federal advisory committee that provides an organized public forum for the discussion of relevant tax administration issues between IRS officials and representatives of the public. IRSAC members offer constructive observations regarding current or proposed IRS policies, programs and procedures.

November 17, 2021: The IRS published a news release announcing it unveiled a new how-to video series enabling taxpayers to avoid potential scams by considering and applying for an Offer in Compromise themselves and to avoid paying excessive fees to companies advertising outlandish claims.

November 17, 2021: The IRS published a news release announcing the launch of an improved identity verification and sign-in process that enables more people to securely access IRS online tools and applications.

November 17, 2021: The IRS’s National Taxpayer Advocate published a blog post indicating that US Congress [...]

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IRS Announces Nonacquiescence in Mayo Tax Regulation Invalidity Holding

We previously wrote here and here about decisions made by the District Court of Minnesota and the US Court of Appeals for the Eighth Circuit in Mayo Clinic v. United States regarding challenges to the validity of certain Treasury Regulations promulgated under Internal Revenue Code (Code) Section 170. In that case, the Eighth Circuit held for the taxpayer in part and the government in part and remanded to the district court to further develop the record and address certain issues.

The Internal Revenue Service (IRS) recently announced in an Action on Decision (AOD) that it will not acquiesce in the Eighth Circuit’s holding, which invalidated Treas. Reg. § 1.170A-9(c)(1)’s requirement that the primary function of an education organization described in Code Section 170(b)(1)(A)(ii) must be the presentation of formal instruction. This means that in all cases not appealable to the Eighth Circuit, the IRS will not follow this holding and will continue to litigate the issue.

The IRS’s policy is to announce at an early date whether it will follow the holdings in certain cases, and it does so by making an announcement in an AOD. A nonacquiescence is not binding on courts or the taxpayers but merely signals the IRS’s position that it disagrees with a court decision. (Sometimes the IRS will acquiesce in a decision.) Given that an AOD is published in the Internal Revenue Bulletin, it could be argued that the IRS’s action constitutes published guidance taxpayers can rely on. The IRS’s list of AODs, with links to each action, can be found here.




Weekly IRS Roundup November 1 – November 5, 2021

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 1, 2021 – November 5, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

November 1, 2021: The IRS released a memorandum, providing guidance on the refund recoupment process for employees of Specialty Collection Offer in Compromise. Beginning with offers accepted on or after November 1, 2021, the offer in the compromise refund recoupment process will no longer be applicable for offsetting tax periods included on Form 656.

November 1, 2021: The IRS released a memorandum, extending certain temporary guidance related to taxpayer contact, initial contact and asset evaluations with respect to Internal Revenue Manual SBSE-05-0321-0019, Extension of Temporary Guidance for Field Collection and Specialty Collection Offers in Compromise Procedures During the COVID-19 Pandemic and Resumption of NFTL Procedures. The memorandum also extends the waiver that requires a field call prior to acceptance of certain Offers in Compromise in accordance with IRM 5.8.4.8(10) until January 31, 2022. The temporary guidance regarding Notice of Federal Tax Lien (NFTL) determinations and filings was not extended.

November 2, 2021: The IRS released the IRS Chief Counsel code and subject matter directory for November 2021.

November 3, 2021: The IRS published a news release, reminding taxpayers that a special tax provision will allow more Americans to easily deduct up to $600 in donations to qualifying charities on their 2021 federal income tax return. A temporary law change now permits them to claim a limited deduction on their 2021 federal income tax returns for cash contributions made to qualifying charitable organizations.

November 3, 2021: The IRS published FAQs concerning carried interest reporting details for partnerships. The purpose of the FAQs is to provide guidance relating to both pass-through entity filing and reporting requirements and owner taxpayer filing requirements in accordance with US Department of the Treasury (Treasury) regulations revised in T.D. 9945 (concerning guidance under Section 1061, which recharacterizes certain net long-term capital gains of a partner that holds one or more applicable partnership interests as short-term capital gains).

November 3, 2021: The IRS published a news release, announcing that victims of Hurricane Ida in parts of Connecticut now have until January 3, 2022, to file various individual and business tax returns and make tax payments.

November 3, 2021: The IRS and Treasury published a notice and request for comments concerning third-party disclosure requirements in IRS regulations. Written comments are due on or before January 3, 2022.

November 5, 2021: The IRS published a practice unit concerning expense allocation and apportionment when calculating a foreign tax credit under Section 904. The practice unit was revised to correct an error and supersedes the August 29, 2016, practice unit with the same title.

November 5, 2021: The IRS and Treasury
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