GILTI
Subscribe to GILTI's Posts

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.




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.

Access the article.




Weekly IRS Roundup November 30 – December 4, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 30, 2020 – December 4, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

November 30, 2020: After releasing a pre-publication draft in early October, the IRS published TD 9926 in the Federal Register, which provides final regulations regarding withholding of tax and information reporting with respect to certain dispositions of interests in partnerships engaged in a trade or business within the United States under section 1446(f).

December 3, 2020: The IRS released Rev. Rul. 2020-28 related to the determination of the rate of interest under section 6621.

December 3, 2020: The IRS released Draft Instructions to Form 8992 related to the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).

December 4, 2020: The IRS issued REG-111950-20 regarding passive foreign investment companies (PFICs) and the treatment of qualified improvement property under the alternative depreciation system.

December 4, 2020: The IRS issued TD 9936 regarding PFICs.

December 4, 2020: The IRS issued the Fall 2020 Statistics of Income Bulletin providing data about tax and information returns. The Bulletin highlights high-income tax returns for Tax Year 2017 and partnership returns for Tax Year 2018.

December 4, 2020: The IRS issued a Statement warning that employers will experience delays in receiving payments associated with Form 7200 Advance Payment of Employer Credits.

December 4, 2020: The IRS released Internal Revenue Bulletin 2020-50, dated December 7, 2020, containing the following highlights: Notice 2020-83 (Employee Plans); TD 9923 (Exempt Organizations); Rev. Proc. 2020-51 (Income Tax); Rev. Rul. 2020-26 (Income Tax); Rev. Rul. 2020-27 (Income Tax).

December 4, 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 Brian Moore in our Washington, DC, office for this week’s roundup.




Weekly IRS Roundup October 26 – October 30, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 26, 2020 – October 30, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

October 26, 2020: The IRS released Rev. Proc. 2020-45 regarding inflation adjusted items for 2021.

October 26, 2020: The IRS released Notice 2020-79, which sets out cost-of-living adjustments for benefits and contributions under qualified retirement plans.

October 27, 2020: The IRS published corrections to TD 9901 regarding the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).

October 30, 2020: The IRS and US Department of the Treasury released Proposed Regulations containing guidance on the average income test for the low-income housing tax credit. There is a public comment period until December 29, 2020.

October 30, 2020: The IRS released Internal Revenue Bulletin 2020-45, dated November 2, 2020, containing the following highlights: Rev. Proc. 2020-43 (Employee Plans); Rev. Proc. 2020-46 (Employee Plans); Notice 2020-77 (Employment Plans); Announcement 2020-40 (Income Tax); Rev. Proc. 2020-44 (Income Tax); Rev. Rul. 2020-22 (Income Tax); Rev. Rul. 2020-24 (Income Tax); TD 9911 (Income Tax); TD 9913 (Income Tax); TD 9918 (Income Tax).

October 30, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).




Weekly IRS Roundup September 28 – October 2, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 28, 2020 – October 2, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

September 29, 2020: The IRS published final regulations related to the source of income for certain property sales and modifying rules for determining whether foreign source income is effectively connected with a US trade or business.

September 29, 2020: The IRS published final regulations related to a wide range of foreign tax credit topics. The regulations provide guidance on the allocation and apportionment of deductions and creditable foreign taxes, the definition of financial services income, foreign tax redeterminations, availability of foreign tax credits under the transition tax, the application of the foreign tax credit limitation to consolidated groups, adjustments to hybrid deduction accounts to take into account certain inclusions in income by a United States shareholder, conduit financing arrangements involving hybrid instruments and the treatment of certain payments under the global intangible low-taxed income provisions.

October 1, 2020: The IRS published Notice 2020-70 generally removing Form 1040NR, US Nonresident Alien Income Tax Return, from the list of returns that are administratively exempt from the electronic filing requirement.

October 1, 2020: The IRS published final regulations related to savings programs for eligible individuals with a disability under section 529A.

October 1, 2020: The IRS released an Office of Chief Counsel Notice related to settlement options for syndicated conservation easement transactions.

October 2, 2020: The IRS published Notice 2020-76 providing for transition relief related to information reporting requirements related to the Affordable Care Act.

October 2, 2020: The IRS updated the instructions for Form 8858: Information Return of US Persons with Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs) to reflect changes due to the COVID-19 pandemic.

October 2, 2020: The IRS released Internal Revenue Bulletin 2020-41, dated October 5, 2020, containing the following highlights: Announcement 2020-12 (Administrative); Rev. Proc. 2020-42 (Administrative); Rev. Rul. 2020-20 (Income Tax); Rev. Rul. 2020-21 (Income Tax); TD 9915 (Income Tax); Notice 2020-73 (Income Tax); Notice 2020-74 (Income Tax).

September 25, 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 Brian Moore in our Washington, DC, office for this week’s roundup.




Weekly IRS Roundup August 31 – September 4, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 31, 2020 – September 4, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

September 1, 2020: The IRS released for publication in the federal register final regulations providing additional guidance on the base erosion and anti-abuse tax (BEAT) imposed on certain large corporate taxpayers with respect to certain payments made to foreign related parties. The final regulations affect corporations with substantial gross receipts that make payments to foreign related parties.

September 1, 2020: The IRS announced the launch of the Bipartisan Budget Act (BBA) Centralized Partnership Audit Regime webpage. The Centralized Partnership Audit Regime replaces the Tax Equity and Fiscal Responsibility Act (TEFRA) and the electing large partnership rules. The centralized partnership audit regime, or BBA, is generally effective for tax years beginning January 2018. Under the BBA, the IRS generally assesses and collects any understatement of tax (called an imputed underpayment) at the partnership level.

September 1, 2020: The IRS published a memorandum providing guidance on the Bipartisan Budget Act of 2015 (BBA) until Internal Revenue Manual (IRM) 8.19 is revised. The guidance covers: (1) Appeals TEFRA Team (ATT) and Technical Guidance (TG) referrals; (2) Tax Court rules on BBA partnership proceedings; (3) Tax Computation Specialist (TCS) assistance; (4) Tried Cases and Counsel Settlements; (5) Tax Court Decision Appealed and Final Decision from Appeal; and (6) Department of Justice (DOJ) cases.

September 1, 2020: The IRS announced its intention to issue regulations addressing the application of sections 951 and 951A of the Internal Revenue Code (Code) to certain S corporations (as defined in section 1361(a)(1)) with accumulated earnings and profits, as described in section 316(a)(1) (AE&P). The notice also announces that the US Department of the Treasury and the IRS intend to issue regulations addressing the treatment of qualified improvement property (QIP) under the alternative depreciation system (ADS) of section 168(g) for purposes of calculating qualified business asset investment (QBAI) for purposes of the foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI) provisions. Comments should be submitted by November 2, 2020.

September 1, 2020: The IRS requested comments on Revenue Procedure 2015-40 (that provides guidance for taxpayers who believe that the actions of the United States, a treaty country or both result or will result in taxation that is contrary to the provisions of an applicable tax treaty) to submit the requested information in order to receive assistance from the IRS official acting as the US competent authority. Comments are due on or before November 2, 2020.

September 3, 2020: The IRS released the fourth quarter update to the 2019–2020 Priority Guidance Plan. The fourth quarter update to the 2019-2020 plan reflects 53 additional projects which have been published [...]

Continue Reading




Weekly IRS Roundup August 10 – August 14, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 10, 2020 – August 14, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

August 10, 2020: The IRS published corrections to a notice of proposed rulemaking related to section 245A(e) (Hybrid Dividends) that was published in the Federal Register on April 8, 2020. The notice contained proposed regulations that adjust hybrid deduction accounts to take into account earnings and profits of a controlled foreign corporation that are included in income by a US shareholder. The corrections are effective on August 11, 2020.

August 10, 2020: The IRS published corrections to final regulations from Treasury Decision 9896 that were published in the Federal Register on Wednesday, April 8, 2020. The final regulations provide guidance regarding hybrid dividends and certain amounts paid or accrued pursuant to hybrid arrangements, which generally involve arrangements whereby US and foreign tax law classify a transaction or entity differently for tax purposes. The correction is effective on August 12, 2020.

August 12, 2020: The IRS published a memorandum that modifies Taxpayer Advocate Service (TAS) case acceptance criteria for cases involving Economic Impact Payments (EIPs).

August 12, 2020: The IRS announced changes to user fees relating to certain requests for letter rulings and determinations that will take effect on January 4, 2021. The increased user fees described in this announcement will be reflected in Rev. Proc. 2021-4, which will be published in Internal Revenue Bulletin 2021-1 on January 4, 2021.

August 13, 2020: The IRS published a practice unit concerning the identification, review of the computation and determination of the circumstances when section 986(c) recognition is appropriate in the pre-Tax Cuts and Jobs Act (TCJA) environment. The practice unit addresses two issues: (1) Did the taxpayer correctly compute section 986(c) exchange gain or loss on the distribution of previously taxed earnings and profits (PTEP) to its US parent?; and (2) Was the distribution of previously taxed earnings and profits to the US parent resulting in the section 986(c) exchange gain or loss part of a step transaction that should be collapsed, a transaction lacking a business purpose and/or a transaction that lacks economic substance?

August 14, 2020: The IRS released Internal Revenue Bulletin 2020-34, dated August 17, 2020, containing the following: (1) REG-111879-20 (Employment Tax); (2) TD 9904 (Employment Tax); (3) REG-112042-19 (Excise Tax); (4) Notice 2020-58 (Income Tax); and (5) REG-132766-18 (Income Tax).

August 14, 2020: The IRS published corrections to final regulations (TD 9885) that were published in the Federal Register on Friday, December 6, 2019. The final regulations implement the base erosion and anti-abuse tax, which is designed to prevent the reduction of tax liability by certain large corporate taxpayers through certain payments [...]

Continue Reading




Weekly IRS Roundup July 20 – July 24, 2020

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

July 20, 2020: The IRS published a news release on after-tax-day tips for taxpayers who missed the July 15, 2020, tax deadline and did not request an extension. The tips include advice on obtaining a refund and on reducing penalties and interest.

July 20, 2020: The IRS released public comments on the 2020-21 Priority Guidance Plan in response to Notice 2020-47, which invited the public to submit recommendations for items to be included on the 2020-2021 Priority Guidance Plan. The US Department of the Treasury and the IRS use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices and other published administrative guidance.

July 21, 2020: The IRS announced the creation of the new Enterprise Digitalization and Case Management office, which will spearhead IRS efforts to empower taxpayers and IRS employees to rapidly resolve issues in a simplified digital environment. The office’s efforts will support overall IRS modernization and implementation of long-term changes stemming from the Taxpayer First Act. The new stand-alone office will focus on enhancing the taxpayer experience by improving business processes and modernizing systems.

July 22, 2020: The IRS published a notice to solicit comments on Form 3800 (General Business Credit). Section 38 permits taxpayers to reduce their income tax liability by the amount of their general business credit, which is an aggregation of various credits. Form 3800 is used to figure the correct credit. Comments are due on or before September 21, 2020.

July 23, 2020: The IRS published a notice requesting comments on TD 8435 that provides final income, estate and gift, and employment tax regulations relating to elections made under the Technical and Miscellaneous Revenue Act of 1988. This regulation enables taxpayers to take advantage of various benefits provided by the Internal Revenue Code (Code). Comments are due on or before September 21, 2020.

July 23, 2020: The IRS published final regulations under the global intangible low-taxed income (GILTI) and subpart F income provisions of the Code regarding income subject to a high rate of foreign tax. The final regulations allow taxpayers to exclude certain high-taxed income of a controlled foreign corporation from their GILTI computation on an elective basis. The final regulations are effective on September 21, 2020.

July 23, 2020: The IRS also published proposed regulations that generally conform the rules implementing the subpart F high-tax exception to the rules implementing the GILTI high-tax exclusion set forth in the final regulations, and provided for a single election under section 954(b)(4) for purposes [...]

Continue Reading




Weekly IRS Roundup July 6 – July 10, 2020

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

July 6, 2020: The IRS added new frequently asked questions on the treatment of grants or loans to businesses through the Coronavirus Relief Fund established by the Coronavirus Aid, Relief and Economic Security (CARES) Act. The IRS stated that a government grant is taxable because the grant generally is not excluded from the business’s gross income except in narrow circumstances. A government loan, however, generally is not included in gross income except to the extent it is forgiven. If a government forgives all or a portion of the loan, then the amount forgiven is included in gross income and taxable unless an exclusion applies. If an exclusion applies, the IRS indicated the taxpayer may lose an equivalent amount of tax attributes.

July 6, 2020: The IRS added frequently asked questions on the treatment of grants or loans to health care providers through the Provider Relief Fund established by the CARES Act. The IRS stated that payments from this fund do not qualify as a qualified disaster relief payment under section 139 of the Internal Revenue Code (IRC) and, in turn, are includible in gross income. The IRS also stated that a tax-exempt recipient generally is not subject to tax on a fund payment unless the amount is a reimbursement to an unrelated trade or business under section 511.

July 6, 2020: The IRS added content to its Large Business & International (LB&I) Active Campaign covering section 965 for individuals. In connection with the transition to a participation exemption system, certain individuals had an obligation to include in gross income (and report) their pro rata share of the untaxed earnings and profits of certain directly and indirectly owned foreign corporations. The IRS indicated it will address noncompliance through soft letters and examinations.

July 7, 2020: The IRS issued a news release reminding tax-exempt organizations that certain forms they file with the IRS are due on July 15, 2020, including Form 990. Tax-exempt organizations that need additional time to file beyond the July 15 deadline can request an automatic extension by filing Form 8868. The IRS also indicated that extending the time for filing a return does not extend the time for paying tax.

July 8, 2020: The IRS issued a news release reminding certain taxpayers to restart their tax payments by July 15. Some taxpayers took advantage of tax relief measures under the People First Initiative and did not make previously owed tax payments between March 25 and July 15. The IRS also set forth what taxpayers should do to resume their payment agreements to the IRS, including Installment Agreements, Offers in Compromise and [...]

Continue Reading




STAY CONNECTED

TOPICS

ARCHIVES