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Weekly IRS Roundup May 1 – May 7, 2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 1, 2022 – May 7, 2022. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

May 2, 2022: The IRS issued a news release as part of National Small Business Week, setting forth various resources to assist entrepreneurs with the tax aspects of starting and running a small business.

May 2, 2022: The IRS issued a news release, announcing the opening of the application period for 2023 grants under the Low Income Taxpayer Clinic (LITC) program, an IRS program created to assist organizations in providing pro bono representation to low-income and English as a second language (ESL) taxpayers in federal tax disputes.

May 3, 2022: The IRS issued Notice 2022-23, setting forth proposed changes to the procedures regarding qualified intermediary withholding agreements under Treas. Reg. §§ 1.1441-1(e)(5) and (e)(6). The Notice states that the proposed changes, subject to modifications based on comments received, will be finalized in a forthcoming Revenue Procedure and apply to qualified intermediary withholding agreements in effect on or after January 1, 2023.

May 3, 2022: The IRS issued a news release as part of National Small Business Week, urging small business owners to take advantage of the deductions for business-related food and beverage expenses (as expanded for 2022 pursuant to Section 274(n)(2)(D) of the Code), home office expenses and certain other deductions and benefits applicable to small businesses.

May 4, 2022: The IRS issued proposed regulations, providing updates to the rules regarding the use of actuarial tables in valuing annuities, interests for life or a term of years and remainder or reversionary interests under Section 7520 of the Code.

May 4, 2022: The IRS issued a news release as part of National Small Business Week, providing certain resources regarding estimated tax payments and encouraging taxpayers to make estimated tax payments electronically.

May 5, 2022: The IRS issued a news release as part of National Hurricane Preparedness Week and National Wildfire Awareness Month, reminding taxpayers of certain best practices to minimize the effect of natural disasters on tax compliance.

May 5, 2022: The IRS issued a news release as part of National Small Business Week, urging small businesses to take advantage of electronic options to file payroll tax returns and to pay and make deposits of payroll taxes.

May 6, 2022: The IRS issued Revenue Procedure 2022-22 and an accompanying news release, providing simplified procedures for certain residents of Puerto Rico to claim the Child Tax Credit under Section 24 of the Code, as expanded by the American Rescue Plan Act of 2021 (ARPA).

May 6, 2022: The IRS issued a news release as part of National Small Business Week, providing information to [...]

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Weekly IRS Roundup April 17 – April 23, 2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 17, 2022 – April 23, 2022. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

April 18, 2022: The IRS issued Revenue Ruling 2022-9, providing various prescribed interest rates for federal income tax purposes for May 2022.

April 18, 2022: The IRS issued a news release, reminding taxpayers of the option to request an automatic extension of time to file individual income tax returns and noting certain categories of taxpayers who automatically qualify for extensions.

April 18, 2022: The IRS issued a news release, setting forth certain penalty relief options that may be available to taxpayers who are unable to pay increased tax liabilities resulting from retroactive claims for employee retention tax credits.

April 19, 2022: The IRS issued Revenue Procedure 2022-23, providing procedures for taxpayers to make late elections under Sections 168(j)(8), 168(l)(3)(D) and 181(a)(1) of the Code, relating to certain depreciation deductions, for taxable years 2018 and 2019.

April 19, 2022: The IRS issued Notice 2022-16, providing the monthly update to certain interest rates used for pension plan funding and distribution purposes.

April 19, 2022: The IRS issued a news release, announcing that the 2022 IRS Nationwide Tax Forum, an annual series of continuing education seminars for tax professionals, will be held virtually from July 19, 2022, through August 18, 2022.

April 19, 2022: The IRS issued a news release urging taxpayers who missed the April 18, 2022, filing deadline to file their individual tax returns as soon as possible in order to obtain tax refunds and limit penalties and interest.

April 20, 2022: The IRS issued a news release, announcing the awarding of more than $12.1 million in grants to 131 organizations across the country as part of its Low Income Taxpayer Clinic program, a program to assist organizations in providing pro bono representation to low-income and English as a second language (ESL) taxpayers in federal tax disputes.

April 21, 2022: The IRS issued a news release, reminding tax-exempt organizations of the May 16, 2022, filing deadline with respect to certain information and tax returns.

April 22, 2022: 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 Washington, DC, office for this week’s roundup.




Weekly IRS Roundup April 3 – April 9, 2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 3, 2022 – April 9, 2022. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

April 4, 2022: The IRS issued a news release, announcing that the application period for 2023 grants under the Low Income Taxpayer Clinic (LITC) program, an IRS program created to assist organizations in providing pro bono representation to low-income and English as a second language (ESL) taxpayers in federal tax disputes, will begin on or around May 2, 2022.

April 4, 2022: The IRS issued a news release, announcing that, in advance of the federal tax filing deadline, free face-to-face tax preparation assistance will be provided at Taxpayer Assistance Centers around the country on April 9, 2022.

April 5, 2022: The IRS issued proposed regulations amending the eligibility requirements for the premium tax credit under Section 36B of the Code. The proposed regulations generally provide that, for purposes of determining eligibility for the premium tax credit, the affordability of an employer-sponsored health plan with respect to an employee’s family members is determined based on the cost of covering the employee and their family members, rather than on the cost of covering the employee individually.

April 6, 2022: The IRS issued a news release, reminding taxpayers who make estimated tax payments that the due date for the first estimated tax installment is April 18, 2022.

April 8, 2022: 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 Washington, DC, office for this week’s roundup.




A Sit-Down with Andrew VanSingel

Andrew Roberson interviewed Andrew VanSingel, who dedicated his career to providing pro bono and public services to low-income taxpayers, for an American Bar Association Pro Bono Matters column. They discussed VanSingel’s work in the disaster relief area and at TAS, shared advice for young lawyers who want to get more involved in pro bono work and more.

Access the article.




Pro Bono Update: A Team Effort by Tax Helpers

Our Tax Practice Group recently wrote an article for the American Bar Association’s quarterly newsletter on pro bono matters entitled, “A Team Effort by Tax Helpers.” The article discusses our recent pro bono efforts, which includes teaming up with a low income taxpayer clinic in a docketed Tax Court case. (The full article can be accessed here.)

As we have written in the past, we believe tax practitioners should strive to assist low income taxpayers in their disputes with the Internal Revenue Service to ensure taxpayers of limited means have access to full and adequate representation. We know many other law firms and tax volunteers provide such pro bono services and we look forward to continuing to help those in need.




ABA Recommends Allowing Limited Representation Before the Tax Court

Last May, the US Tax Court (Tax Court) announced that approximately 70 percent of all taxpayers in Tax Court cases and approximately 90 percent of taxpayers in small tax cases are self-represented. The Tax Court encourages assistance by pro bono attorneys at its calendar calls, and strives to provide information to taxpayers about how they may be able to connect with those attorneys (more background on the Tax Court’s efforts can be found here). Although pro bono attorneys appear at Tax Court calendar calls to assist self-represented taxpayers, ethical rules may limit the ability of these attorneys to provide certain kinds of legal assistance. For example, once an attorney makes an appearance in a court case, typically the attorney cannot simply withdraw and stop representing the client. The attorney may have to get both the client’s and court’s consent to withdraw from the representation. The inability to provide legal advice for one or more occasions without potentially being stuck on a case is perceived to dissuade many practitioners from providing pro bono service.

In response to these concerns, the American Bar Association (ABA) Section of Taxation recently provided comments to the Tax Court regarding potential amendments to its rules relating to appearance and representation before the Tax Court. The ABA comments encourage the Tax Court to consider a limited appearance rule for pro bono attorneys appearing at the calendar call. This one-time appearance representation may encourage more attorneys to get involved in providing pro bono legal assistance to taxpayers. We will provide an update on any future action that the Tax Court may take in this regard.

Links to McDermott posts and articles about tax pro bono efforts by volunteer attorneys are listed below:

 




Giving Back – Providing Pro Bono Tax Assistance

Here at McDermott, we value giving back to the community through pro bono efforts.  In particular, we provide substantial assistance in pro bono tax cases to low-income individuals through our relationships with low-income taxpayer clinics throughout the country.  Over the years, we have settled dozens of cases for low-income taxpayers in docketed tax cases and routinely reduced or eliminated deficiencies asserted by the Internal Revenue Service (IRS).  When settlement has not been possible, we have litigated cases in the Tax Court and obtained favorable results not just for our clients but for the low-income taxpayer community as a whole.  For example, we represented a husband and wife on a penalty issue involving an issue of first impression and convinced the Tax Court that the IRS had for years been improperly asserting and collecting penalties on improperly claimed refundable tax credits. In a recent article, we detail some of the pro bono efforts by low-income taxpayer clinics and private practitioners.

Practice Point:  In addition to assisting low-income individuals who cannot afford legal representation, providing pro bono tax services benefits tax practitioners in many ways.  It provides the opportunity for younger attorneys to take responsibility for a case and to get valuable experience in dealing with clients, negotiating with the IRS, and potentially gaining courtroom experience.  Assisting taxpayers on a pro bono basis is also rewarding and can make a significant difference in the lives of low-income individuals.




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