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Weekly IRS Roundup August 17 – August 21, 2020

by McDermott Will & Emery | Aug 26, 2020 | IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 17, 2020 – August 21, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

August 19, 2020: The IRS requested comments from large corporate taxpayers currently utilizing the procedures under Revenue Procedure 94-69 to disclose changes in tax positions after the opening of an examination. The IRS is considering obsoleting Revenue Procedure 94-69, which is available to a small group of large corporate taxpayers. Revenue Procedure 94-69 provides special procedures for taxpayers that are subject to the (former) Coordinated Examination Program to show additional tax due or make disclosures to avoid the imposition of accuracy-related penalties for negligence, disregard of rules or regulations or substantial understatement of income tax under sections 6662(b)(1) and (b)(2). Comments are due by October 19, 2020.

August 19, 2020: The IRS published a practice unit concerning the taxability of distributions from an S corporation that either (1) does not have accumulated earnings and profits (AE&P), or (2) makes distributions from sources other than AE&P; that is, nondividend distributions made from the accumulated adjustments account, other adjustments account or a shareholder-level previously taxed income account from before 1983 to the extent it still exists. The practice unit also addresses what items to consider to determine the taxability of nondividend distributions, liquidating distributions and sale-or-exchange redemption distributions.

August 19, 2020: The IRS published a practice unit concerning the last-in first-out (LIFO) pooling method and taxpayers who may elect to compute opening and closing inventories for goods using LIFO.

August 20, 2020: The IRS published a memorandum concerning guidance for Taxpayer Advocate Service (TAS) employees on the types of cases accepted into TAS under Criteria 9 – Public Policy. The Taxpayer Advocate is adding four cases that fit the policy; (1) organizations where the IRS automatically revoked their tax-exempt status for failure to file an annual return or notice for three consecutive years; (2) cases involving any tax account-related issue referred to TAS from a Congressional office, including limited Economic Impact Payment (EIP) issues; (3) cases involving revocation, limitation or denial of a passport; and (4) cases that have been referred to a Private Collection Agency for collection of a federal tax debt.

August 20, 2020: The IRS published corrections to Treasury Decision 9614, which was published in the Federal Register on Tuesday, March 19, 2013. Treasury Decision 9614 contained final regulations that apply to transfers of certain property by a domestic corporation to a foreign corporation in certain nonrecognition exchanges, or to distributions of stock of certain foreign corporations by a domestic corporation in certain nonrecognition distributions. The corrections are effective on August 20, 2020.

August 21, 2020: The IRS announced it has temporarily stopped mailing notices to taxpayers with [...]

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Weekly IRS Roundup May 18 – May 22, 2020

by McDermott Will & Emery | May 26, 2020 | IRS Appeals, IRS Guidance, Uncategorized

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.

Weekly IRS Roundup April 6 – 10, 2020

by McDermott Will & Emery | Apr 13, 2020 | IRS Guidance, Tax Refunds, Uncategorized

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 6 – 10, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

April 8, 2020: The IRS announced that four LB&I campaigns related to agricultural chemicals security credit, partial disposition election for buildings, restoration of sequestered alternative minimum tax credit carryforward and work opportunity tax credit have been retired. Even though these issues are no longer LB&I campaigns, such issues may still be identified and included in the scope of an LB&I examination.

April 8, 2020: The IRS released Revenue Procedure 2020-23, allowing for eligible partnerships to file amended partnership returns for taxable years beginning in 2018 and 2019 by using Form 1065, US Return of Partnership Income, checking the “Amended Return” box and issuing an amended Schedule K-1 to each of its partners.

April 9, 2020: The IRS issued Revenue Procedure 2020-24, which provides guidance regarding (i) an election under section 172(b)(3) to waive the carryback period for a net operating loss (NOL) arising in a taxable year beginning after December 31, 2017 and before January 1, 2020, (ii) excluding from the carryback period any taxable year in which the taxpayer has a section 965(a) inclusion, and (iii) for an NOL incurred in a taxable year that began before January 1, 2018 and ended after December 31, 2017, waiving or reducing the carryback period or revoking a prior election to waive the carryback period.

April 9, 2020: The IRS released Notice 2020-26, which provides for a six-month extension for the deadline for filing an application for a tentative carryback adjustment under section 6411 with respect to the carryback of an NOL that arose in any taxable year that began during calendar year 2018 and that ended on or before June 30, 2019.

April 10, 2020: The IRS issued Revenue Procedure 2020-22 to provide guidance regarding the election under section 163(j)(7)(B) to be an electing real property trade or business and the election under section 163(j)(7)(C) to be an electing farming business for purposes of the business interest expense deduction limitation under section 163(j).

April 10, 2020: The IRS and the Treasury Department launched a new web tool to allow people who do not normally file a tax return to register for Economic Impact Payments. The new web tool is intended to be simple and only take taxpayers a few minutes to register.

April 10, 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.

Weekly IRS Roundup March 30 – April 3, 2020

by McDermott Will & Emery | Apr 7, 2020 | IRS Guidance, Tax Refunds, Uncategorized

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 30 – April 3, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

March 30, 2020: Economic impact payments will be sent out over the next three weeks. These payments will be distributed automatically, with no action needed by most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment. The Treasury Department plans to develop a web-based portal for individuals to provide their banking information to the IRS for direct deposit of the economic impact payments.

March 31, 2020: The Treasury Department and the Internal Revenue Service launched the Employee Retention Credit to encourage businesses financially impacted by COVID-19 to keep employees on their payroll. The refundable tax credit is 50 percent of qualifying wages of up to $10,000 paid by an eligible employer. The credit is available to all employers regardless of size, including tax-exempt organizations, with two exceptions: state and local governments and their instrumentalities and small businesses who take small business loans.

April 1, 2020: The IRS issued corrections to T.D. 9889, which contains final regulations governing the extent to which taxpayers may elect the federal income tax benefits with respect to certain equity interests in a qualified opportunity fund. Such regulations, issued on January 13, 2020, contained errors that may be misleading to taxpayers. These corrections are effective as of April 1, 2020, applicable as of January 13, 2020, and will be published to the Federal Register on April 6, 2020.

April 1, 2020: The Treasury Department and the IRS announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment (“EIP”). The IRS will use the information on Form SSA-1099 and Form RRB-1099 to generate $1,200 EIPs for those who did not file tax returns in 2018 or 2019. Recipients will receive the EIP as a direct deposit or by paper check, just as they would normally receive their benefits.

April 2, 2020: The IRS issued a warning about COVID-19 related scams. The IRS reiterated that the IRS will not to call you to verify or provide your financial information so you can get an EIP or your refund faster. Taxpayers should also be on the lookout for emails, text messages, websites and social media messages that request money or personal information. Scammers may emphasize the words “stimulus check” or “stimulus payment.” The official term is “economic impact payment.

April 3, 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 [...]

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