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Weekly IRS Roundup April 8 – 12, 2019

by | Apr 15, 2019 | , ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 8 – 12, 2019.

April 8, 2019: The IRS issued a news release warning taxpayers against rushing to file their returns and recommending they file for an extension if needed.

April 9, 2019: The IRS issued a news release seeking volunteers for the taxpayer advocate panel. The application process is open through May 3, 2019.

April 10, 2019: The IRS issued corrections to final regulations (TD 9846) implementing Section 965 of the code.

April 11, 2019: The IRS released Revenue Procedure 2019-18 providing a safe harbor for professional sports teams when determining the value of player and staff-member contracts for the purpose of recognizing gain or loss on a trade, staff-member contract or draft pick.

April 11, 2019: The IRS issued corrections to proposed regulations (REG–104464–18) dealing with the amount of the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).

April 12, 2019: The IRS issued a news release announcing 50 million people still needed to file their 2018 returns as the deadline approaches.

April 12, 2019:  IRS Commissioner Chuck Rettig released a message thanking taxpayers for filing their returns.

Special thanks to Terence McAllister in our New York office for this week’s roundup.



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Weekly IRS Roundup March 11 – 15, 2019

by | Mar 18, 2019 | , ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 4 – 8, 2019.

March 11, 2019: The IRS cancelled a public hearing scheduled for March 14 on proposed regulations on changes to the foreign tax credit under Section 904 of the Code.

March 12, 2019: The IRS issued Notice 2019-10 requesting comments on possible changes to rules regarding the excise tax treatment of fuel used in a motor vehicle to operate auxiliary equipment via a power take-off.

March 12, 2019: The IRS issued a notice listing the names of individuals losing US citizenship (within the meaning of section 877(a) or 877A) pursuant to Section 6039G of the Code.

March 12, 2019: The IRS announced that a private letter ruling pilot program addressing whether stock distributions are tax free under Section 355 would be extended indefinitely.

March 13, 2019: The IRS issued Revenue Ruling 2019-06 providing tables of covered compensation under Section 401(1)(5)(e) of the Code.

March 13, 2019: The IRS issued a news release providing information on up to $1.4 billion of unclaimed income tax refunds from 2015. The unclaimed refunds potentially affect up to 1.2 million taxpayers who did not file 2015 returns.

March 13, 2019: The IRS issued a news release detailing the rise in the use of IRS FreeFile to prepare and electronically file returns. The IRS states 1.4 million taxpayers took advantage of FreeFile as of March 8, a 5 percent increase from the same time last year.

March 14, 2019: The IRS issued Notice 2019-21 providing guidance on the corporate bond monthly yield curve, spot segment rates under Section 417(e)(3) and the 24 month average segment rates under Section 430(h)(2).

March 15, 2019: The IRS released Revenue Ruling 2019-08 providing monthly tables of prescribed rates under numerous Code sections including the applicable federal rate for April.

Special thanks to Terence McAllister in our New York office for this week’s roundup.



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Weekly IRS Roundup February 11 – 15, 2019

by | Feb 19, 2019 | , , ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of February 11 – 15, 2019.

February 11, 2019: The IRS issued a news release promoting online resources for answering taxpayer questions, in anticipation of high call volume over the Presidents Day weekend.

February 12, 2019: The IRS issued a news release announcing the release of the National Taxpayer Advocate’s 2018 Annual Report to Congress, which reported on, among other things, the effect of the shutdown on IRS operations and the need to modernize the IRS’s IT systems.

February 12, 2019: The IRS issued a news release promoting its “Where’s My Refund?” online tool as a way for taxpayers to check on the status of their tax refunds.

February 13, 2019: The IRS released Revenue Procedure 2019-13, providing a safe harbor method of accounting for determining depreciation deductions for passenger automobiles that qualify for the 100% additional first-year depreciation deduction under section 168(k) of the Code, but that are also subject to depreciation limitations under section 280F of the Code.

February 13, 2019: The IRS issued a news release outlining various payment options available to taxpayers who owe additional tax after filing.

February 14, 2019: The IRS issued Notice 2019-16, providing baseline interest rates referenced in various provisions of the Code dealing with employee benefits.

February 14, 2019: The IRS issued a news release reminding taxpayers that they will be asked to verify their identities when calling the IRS for assistance.

February 15, 2019: The IRS released Revenue Ruling 2019-07, providing various prescribed rates for federal income tax purposes for March 2019.

February 15, 2019: The IRS issued a news release promoting online resources for obtaining prior-year tax records, in anticipation of high call volume over the Presidents Day weekend.

February 15, 2019: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to Le Chen in our DC office for this week’s roundup.



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Joint Committee Releases Overview of Its Refund Review Process

by and | Jan 10, 2019 | , , , , ,

Clients ask us all of the time, “What is the Joint Committee on Taxation’s (JCT) process for reviewing refund claims granted by the Internal Revenue Service (IRS)?” Recently, the JCT has released an overview of its process. Wait, what? After the IRS has agreed to issue you a refund, there is a congressional committee that has to check the IRS’s work? Yep!

Internal Revenue Code (IRC) §6405 prohibits the IRS/US Department of the Treasury from issuing certain refund payments to taxpayers until 30 days after a “report” is given to the JCT. Only refunds “in excess” of $5 million for corporate taxpayers and $2 million for all other taxpayers (partnerships, individuals, trusts, etc.) are required to be reported to the JCT. A refund claim is an amount listed on an amended return (e.g., Forms 1140X and 1120X), tentative carrybacks (e.g., Forms 1139 and 1045), and refunds attributable to certain disaster losses. Numerous types of refund payments are excepted from JCT review, including refunds claimed on originally filed returns, resulting from litigation and employment taxes. It is important to note that this process is not limited to the IRS Examination stage; it can also occur at the IRS Appeals stage or even in tax court litigation. (more…)



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Section 965 Transition Tax Overpayment Addressed in Technical Corrections

by | Jan 4, 2019 | , , ,

On January 2, 2019, the outgoing Chair of the House Ways and Means Committee, Kevin Brady (R-TX), released the Tax Technical and Clerical Corrections Act (the Bill), addressing several technical issues associated with the Tax Cuts and Jobs Act (P.L. 115-97) (TCJA). The Bill includes certain provisions that, if enacted, would affirm Congress’ intent that taxpayers with an overpayment with respect to an installment payment of the transition tax under Internal Revenue Code (Code) Section 965 should be able to claim a credit or refund with respect to such amount. The provisions in the Bill with respect to Code Section 965 overpayments are largely consistent with similar draft legislation introduced on November 26, 2018 (the Retirement, Savings and Other Tax Relief Act of 2018 and the Taxpayer First Act of 2018, or H.R. 88; see prior discussion here). In particular, the Bill provides that where a taxpayer that made an election under Code Section 965(h)(1) to pay the net tax liability under Section 965 in installments has filed a request for a credit or refund with respect to an overpayment, the Internal Revenue Service cannot take any installment into account as a liability for purposes of determining whether an overpayment exists. If enacted, the Bill would permit taxpayers to claim a refund or credit with respect to an installment payment of the taxpayer’s transition tax under Code Section 965. (more…)



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IRS Announces That CAP Will Continue

by and | Aug 28, 2018 | , , , , , , ,

On August 27, 2018, the Internal Revenue Service (IRS) announced that the Compliance Assurance Process (CAP) program will continue, with some modifications.  As we previously discussed, the IRS began an assessment of the CAP program in August 2016 to determine if any recalibration was needed.

CAP is an IRS program that seeks to identify and resolve tax issues through open, cooperative, and transparent interaction between the IRS and Large Business and International (LB&I) taxpayers prior to the filing of a return.  The goal of CAP is greater certainty of the treatment of tax positions sooner and with less administrative burden than conventional post-file audits.  The program began in 2005, and became permanent in 2011.  Several notable taxpayers publically disclose their involvement in the CAP program. (more…)



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SOL and the 1603 Cash Grant – File Now or Forever Hold Your Peace

by , and | May 10, 2018 | , , ,

Taxpayers are running out of time to file refund claims against the government. If the government reduced or denied your Section 1603 cash grant, you can file suit in the Court of Federal Claims against the government to reclaim your lost grant money. Don’t worry, you will not be alone. There are numerous taxpayers lining up actions against the government and seeking refunds from this mismanaged renewable energy incentive program. Indeed, the government lost in round one of Alta Wind I Owner-Lessor C. v. United States, 128 Fed. Cl. 702 (2016). In that case, the trial court awarded the plaintiffs more than $206 million in damages ruling that the government unreasonably reduced their Section 1603 cash grants.

Access the full article.



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Read the October Issue of Focus on Tax Strategies & Developments

by , , , , , , , and | Nov 1, 2017 | , , , , , , ,

The October 2017 issue of Focus on Tax Strategies & Developments has been published. This issue includes five articles that provide insight into US federal and international tax developments and trends across a range of industries, as well as strategies for navigating these complex issues.

Republican Leaders Release Tax Reform Framework
By David G. Noren Alexander Lee

M&A Tax Aspects of Republican Tax Reform Framework
By Alexander Lee, Alejandro Ruiz and Timothy S. Shuman

State and Local Tax Aspects of Republican Tax Reform Framework
By Peter L. Faber

Grecian Magnesite Mining v. Commissioner: Foreign Investor Not Subject to US Tax on Sale of Partnership Interest
Kristen E. Hazel, Sandra P. McGill and Susan O’Banion

The IRS Attacks Taxpayers’ Section 199 (Computer Software) Deductions
Kevin Spencer, Robin L. Greenhouse and Jean A. Pawlow


Read the full issue of Focus on Tax Strategies & Developments. 



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Tax Court Reinforces Plain Meaning Approach in Interpreting Tax Statutes

by and | Sep 1, 2017 | , ,

The Internal Revenue Service (IRS) and taxpayers frequently spar over the meaning and interpretation of tax statutes (and regulations). In some situations, one side will argue that the statutory text is clear while the other argues that it is not and that other evidence of Congress’ intent must be examined. Courts are often tasked with determining which side’s interpretation is correct, which is not always an easy task. This can be particularly difficult where the plain language of the statute dictates a result that may seem unfair or at odds with a court’s views as the proper result.

The Tax Court’s (Tax Court) recent opinion in Borenstein v. Commissioner, 149 TC No. 10 (August 30, 2017), discussed the standards to be applied in interpreting a statute and reinforces that the plain meaning of the language used by Congress should be followed absent an interpretation that would produce an absurd result.

In Borenstein, the taxpayer made tax payments for 2012 totaling $112,000, which were deemed made on April 15, 2013. However, she failed to file a timely return for that year and the IRS issued a notice of deficiency. Before filing a petition with the Tax Court, the taxpayer submitted return reporting a tax lability of $79,559. The parties agreed that this liability amount was correct and that the taxpayer had an overpayment of $32,441 due to the prior payments. However, the IRS argued that the taxpayer was not entitled to a credit or refund of the overpayment because, under the plain language of Internal Revenue Code Sections 6511(a) and (b)(2)(B), the tax payments were made outside the applicable “lookback” period keyed to the date the notice of deficiency was mailed. (more…)



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