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Weekly IRS Roundup June 1 – June 5, 2020

by | Jun 8, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 1 – June 5, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

June 2, 2020: The IRS reminded taxpayers who live and work abroad that they have until July 15, 2020, to file their 2019 federal income tax return and pay any tax due. Typically, the deadline for such returns is June 15.

June 3, 2020: The IRS issued Notice 2020-42 to provide temporary relief from the physical presence requirement in Treasury Regulations § 1.401(a)-21(d)(6) for participant elections required to be witnessed by a plan representative or a notary public, including a spousal consent required under IRC § 417.

June 4, 2020: The IRS issued Notice 2020-39 and updated the Qualified Opportunity Zones frequently asked questions (FAQs). Notice 2020-39 answers questions regarding relief from certain requirements under IRC § 1400Z-2, particularly providing that if a taxpayer’s 180th day to invest in a qualified opportunity zone would have fallen on or after April 1, 2020, and before December 31, 2020, the taxpayer now has until December 31, 2020, to invest that gain into a qualified opportunity fund (QOF). In addition, Notice 2020-39 provides that the period between April 1, 2020, and December 31, 2020, is suspended for purposes of the 30-month period during which property may be substantially improved.

June 4, 2020: The IRS announced that the Office of Chief Counsel will be expanding its Virtual Settlement Days program. Settlement Days events are organized in effort to resolve US Tax Court cases by providing taxpayers not represented by counsel the opportunity to receive free tax advice from certain pro bono groups such as the Low Income Taxpayer Clinics (LITCs) and American Bar Association (ABA).Through this program, taxpayers can also discuss their Tax Court cases and resolve related tax issues with members of the IRS Office of Chief Counsel, the Independent Office of Appeals and Collection.Due to COVID-19, Settlement Days events are now virtual and allow for taxpayers and volunteers to join from any location. 

June 5, 2020: The IRS issued Notice 2020-43 to seek public comment on a proposed requirement for partnerships to use only one of two alternative methods described in Notice 2020-43 to satisfy the Tax Capital Reporting Requirement with respect to partnership taxable years that end on or after December 31, 2020. The two methods that a partnership may use to report, for each partner, are either (i) the partner’s basis in its partnership interest, reduced by the partner’s allocable share of partnership liabilities, as determined under IRC § 752 (Modified Outside Basis Method); or (ii) the partner’s share of previously taxed capital, as calculated under a modified version of Treas. Reg. § 1.743-1(d) (Modified Previously Taxed Capital Method).

June 5, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, [...]

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Tax Court Zooms into Remote Proceedings

by and | Jun 2, 2020 | ,

On May 29, 2020, the US Tax Court (Tax Court) announced that to accommodate continuing uncertainties relating to the COVID-19 pandemic, and until further notice, all court proceedings would be conducted remotely. The Tax Court also issued Administrative Order 2020-02 regarding the conduct of remote proceedings and Administrative Order 2020-03 regarding limited entries of appearance. The Orders are effective until terminated by the Tax Court.

Administrative Order 2020-02 contains sample forms, which are also available under the “Forms” tab on the Tax Court’s website, providing more information on how Tax Court proceedings will be conducted during the pandemic. The updated forms include:

The forms make clear certain requirements that are contained in the Tax Court Rules of Practice and Procedure but were not contained in a prior version of the Standing Pretrial Order. One notable change is that stipulations of fact, which are many times not filed until the day of trial, must now be filed at least 14 days before the trial commences.

Remote proceedings will be conducted using Zoomgov, and access information will be provided to the parties via a meeting identification number and a password. The parties must take steps to ensure that they and their witnesses have adequate technology and internet resources to participate in a remote proceeding. Personal Zoom accounts are not required.

Like most all court proceedings, remote proceedings will be open to the public. The Tax Court will post dial-in information on its website for each trial session, which will allow real-time audio access to proceedings to the general public.

Practice Point:  The Tax Court’s decision to conduct remote proceedings reflects the changing times. Being able to effectively present one’s case in person to a Tax Court Judge requires substantial preparation to tell the taxpayer’s story and advocate for the desired result. Taxpayers and their counsel must now prepare to do the same over videoconference, an arguably much more difficult task. We plan to explore the new rules in more detail in a future article and will keep our readers posted. Taxpayers should be mindful that the general public and the press will be able to virtually attend more court proceedings. Accordingly, your tax issues will be more open and accessible than ever before.



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Weekly IRS Roundup May 25 – May 29, 2020

by | Jun 1, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 25 – May 29, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

May 26, 2020: The IRS and United States Department of the Treasury issued proposed regulations to provide guidance on federal income tax withholding on certain periodic retirement and annuity payments under IRC § 3405(a).

May 26, 2020: The IRS and Treasury issued final regulations clarifying the reporting requirements under IRC § 6033, generally applicable to tax-exempt organizations.

May 26, 2020: The IRS Practice Unit titled Taxation on the Disposition of USRPI by Foreign Persons was updated to clarify that publicly traded stock of a corporation continues to not be US real property interests (USRPI) if held by a 5% or less shareholder. The 5% threshold was increased to 10% only for real estate investment trusts (REITs) under the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).

May 27, 2020: The IRS and Treasury issued Notice 2020-41 to modify prior IRS notices addressing the beginning of construction requirement for both the production tax credit for renewable energy facilities under IRC § 45 and the investment tax credit for energy property under IRC § 48.

May 27, 2020: The IRS announced that some Economic Impact Payments (EIPs) will be sent to taxpayers in the form of a prepaid debit card that will arrive in a plain envelope from “Money Network Cardholder Services.”

May 28, 2020: The IRS announced that taxpayers will be able to file Form 1040-X, Amended US Individual Income Tax Return, electronically this summer. Previously, Form 1040-X was only accepted through the mail.

May 28, 2020: The IRS and Treasury issued proposed regulations regarding the credit for carbon oxide sequestration under IRC § 45Q.

May 29, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to Emily Mussio in our Chicago office for this week’s roundup.



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Weekly IRS Roundup May 18 – May 22, 2020

by | May 26, 2020 | , ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 18 – May 22, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

May 18, 2020:  The U.S. Tax Court announced that comments to the proposed amendments to the Rules of its Practice and Procedure should be emailed to Stephanie A. Servoss, Clerk of the Court, at Rules@ustaxcourt.gov. The Tax Court has not received mail since March 19, 2020.

May 18, 2020:  The IRS added approximately 3,500 phone operators to answer Economic Impact Payment (EIP) questions.

May 19, 2020:  The Large Business & International (LB&I) released information regarding the Swiss Bank Program Campaign. The program allows Swiss financial institutions to provide information on the U.S. persons with beneficial ownership of foreign financial accounts. The campaign will address noncompliance of such taxpayers.

May 20, 2020:  The IRS announced that Andy Keyso has been selected to serve as the Chief of the IRS Independent Office of Appeals, the IRS announced. For more information on Mr. Keyso and IRS Appeals, see our write-up here.

May 21, 2020:  The IRS announced that the 2020 IRS Nationwide Tax Forums will be held virtually in 2020 with a series of live-streamed webinars beginning this July. The 2020 Nationwide Tax Forums will begin on July 21 and continue through August 20.

May 22, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to Emily Mussio in our Chicago office for this week’s roundup.



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Weekly IRS Roundup May 11 – May 15, 2020

by | May 18, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 11 – May 15, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

May 12, 2020: The IRS issued proposed regulations concerning the application of IRC § 162(f), as amended by the Tax Cuts and Jobs Act. The proposed regulations provide that taxpayers may not deduct amounts that, pursuant to court orders or settlement agreements, are paid to, or at the direction of, governments in relation to the violation of any law or the investigation or inquiry into the potential violation of any law.

May 13, 2020: The IRS and the Department of Treasury provided a notice of public hearing for the source of income from certain sales of property under IRC § 863 on June 3, 2020.

May 15, 2020: The IRS expanded partner for Economic Impact Payments to provide information in multiple languages to aid with outreach.

May 15, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to Emily Mussio in our Chicago office for this week’s roundup.



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Despite NOL Carrybacks, IRS Continues to Deny Refunds of Section 965 Transition Tax Overpayments

by | Apr 29, 2020 | ,

In a series of frequently asked questions (FAQs) addressing the interaction of recently enacted net operating loss (NOL) carryback provisions and section 965, the IRS stated that taxpayers may not receive a refund of any section 965 tax payment unless and until the payment exceeds the “entire income tax liability for section 965.” The IRS further stated that such amount “includes all amounts to be paid in installments under section 965(h) in subsequent years.” This position – that taxpayers are not entitled to a refund of an overpayment of the section 965 tax liability unless and until the overpayment amount exceeds the full eight years of installment payments – is consistent with the IRS’s previously published position in PMTA 2018-016 (and as discussed in our prior analyses, here and here).

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Weekly IRS Roundup April 20 – April 24, 2020

by | Apr 27, 2020 | , ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 20 – April 24, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

April 21, 2020: The US Tax Court proposed amendments to its Rules of Practice and Procedure. The proposed amendment to Rule 24 incorporates simplified procedures for the withdrawal and substitution of counsel, and clarifies limitations on counsel’s representation of a party to more closely follow the American Bar Association Model Rules of Professional Conduct. Written comments to the proposed amendments must be received by May 31, 2020.

April 21, 2020: The Treasury Department and the IRS released Revenue Procedure 2020-27 to provide a waiver of the time requirements of IRC § 911(d)(1). The waiver applies to any individual who reasonably expected to meet the eligibility requirements of IRS § 911(d)(1) during 2019 or 2020, but failed to do so because the individual departed a foreign country on or after a specified date due to COVID-19.

April 21, 2020: The Treasury Department and the IRS released Revenue Procedure 2020-20 to address the “substantial presence test” under IRC § 7701(b)(3) and the impact of travel and related disruptions resulting from COVID-19. COVID-19 may have affected the travel plans of foreign travelers who intended to leave the US. The Revenue Procedure provides that when applying the substantial presence test, an alien individual may exclude certain days of physical presence in the United States, including if the individual qualifies for the Medical Condition Exception described in Revenue Procedure 2020-20.

April 21, 2020: The IRS published frequently asked questions (FAQs) titled “Information for nonresident aliens and foreign businesses impacted by COVID-19 travel disruptions.” The FAQs address the impact of COVID-19 travel disruptions on nonresident alien individuals who perform services or other activities in the US and foreign corporations who employ individuals or engage individuals as agents to perform services or other activities in the US may be considered engaged in a US trade or business. The FAQs provides that the affected person may choose an uninterrupted period of up to 60 calendar days, beginning on or after February 1, 2020 and on or before April 1, 2020, during which services or other activities conducted in the US will not be taken into account in determining whether the nonresident alien or foreign corporation is engaged in a US trade or business. However, it must be true that such activities were performed by one or more individuals temporarily present in the US and would not have been performed in the US but for COVID-19 travel disruptions.

April 23, 2020: The Treasury Department and the IRS released proposed regulations addressing how to determine if an exempt organization has more than one unrelated trade or business, and, if so, how to calculate the organization’s unrelated business taxable income.

April 23, 2020: The IRS published FAQs on carrybacks of net operating [...]

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New Revenue Ruling 2020-8 Helps Taxpayers Seek COVID-19 Tax Refund Claims

by and | Apr 23, 2020 | , ,

Recently, in Revenue Ruling 2020-8, the Internal Revenue Service (IRS) announced that it was suspending Revenue Ruling 71-533, which had addressed the interaction of two Internal Revenue Code (IRC) provisions regarding limitations periods on refund claims, pending reconsideration of the holding of the earlier Revenue Ruling.

Under IRC section 6511(d)(2)(A), a taxpayer generally must make a refund claim relating to an overpayment attributable to a net operating loss (NOL) carryback no later than three years after the taxable year in which the NOL was generated. Under IRC section 6511(d)(3)(A), a taxpayer generally must make a refund claim relating to an overpayment attributable to a foreign tax credit carryback no later than ten years after the taxable year in which the foreign taxes were paid.

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Weekly IRS Roundup April 13 – April 17, 2020

by | Apr 21, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 13 – April 17, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

April 16, 2020: The CARES Act made several modifications to net operating losses (NOLs). Specifically, NOLs incurred in 2018, 2019 and 2020 can be carried back to offset taxable income earned during the five-year period prior to the year in which the NOL was incurred. Accordingly, to allow taxpayers to meet the deadlines to submit such refunds, the IRS issued temporary procedures to allow taxpayers to fax certain Forms 1139 and 1045 due to COVID-19.

Only claims allowed under sections 2303 and 2305 of the CARES Act that are made on Form 1139 or Form 1045 are eligible refund claims that can be faxed.

April 16, 2020: The IRS published FAQs to address specific issues related to the deferral of deposit and payment of employment taxes due to the CARES Act. The deferral applies to deposits and payments of the employer’s share of Social Security tax that would otherwise be required to be made during the period beginning on March 27, 2020, and ending December 31, 2020. Employers that received a Paycheck Protection Program loan may not defer the deposit and payment of the employer’s share of Social Security tax that is otherwise due after the employer receives a decision from the lender that the loan was forgiven.

April 17, 2020: The IRS issued Revenue Procedure 2020-25, which provides guidance allowing a taxpayer to change its depreciation under IRC § 168 for qualified improvement property placed in service by the taxpayer after December 31, 2017, in its taxable year ending in 2018, 2019 or 2020.

April 17, 2020: The IRS released FAQs regarding the Economic Impact Payments (EIPs). The FAQs address eligibility, requesting EIPs, calculating EIPs and receiving EIPs.   

April 17, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to Emily Mussio in our Chicago office for this week’s roundup.



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CARES Act Update: IRS Provides Guidance to Partnerships to Take Advantage of Liquidity Benefits

by , and | Apr 13, 2020 | , ,

On April 8, 2020, the Internal Revenue Service (IRS) issued Rev. Proc. 2020-23 in response to the Coronavirus Aid, Relief and Economic Security (CARES) Act. Rev. Proc. 2020-23 eases restrictions on partnerships’ ability to file amended tax returns and issue amended Schedules K-1 in order for their partners to avail themselves of the retroactive tax relief provided by the CARES Act.

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