On October 31, 2018, the Internal Revenue Service (IRS) and US Department of the Treasury (Treasury) released proposed regulations (REG-114540-18) (the Proposed Regulations) that would prevent, in many cases, income inclusions for corporate US shareholders of controlled foreign corporations (CFCs) under section 956. As a result, among other considerations, the Proposed Regulations could significantly expand the ability of corporate US affiliates to benefit from credit support of CFCs.
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 15 – 19, 2018:
October 16, 2018: The IRS issued Rev. Proc. 2018-54, which sets forth procedural rules for certain taxpayers that hold investments in one or more segregated asset accounts to elect to treat certain mortgage-backed securities as having deemed issuers for purposes of the diversification requirements of Internal Revenue Code (Code) Section 817(h).
October 17, 2018: The IRS, in Qualified Intermediaries News, reminded entities seeking Qualified Intermediary, Withholding Partnership or Withholding Foreign Trust status with a withholding agreement effective in 2018 that the deadline for submitting the applications is November 16, 2018.
October 18, 2018: The IRS issued Notice 2018-81, which describes the manner in which taxpayers should notify the IRS of revocation of an election to aggregate or disaggregate certain church-related organizations from treatment as a single employer under Code Section 414(c)(2)(C) and (D).
October 18, 2018: The IRS issued Notice 2018-84, which clarifies the suspension of the personal exemption deduction in the newly-added section 151(d)(5) under certain rules in section 36B and section 6011.
October 19, 2018: The IRS issued proposed regulations for investment in opportunity zones, providing guidance on under new Code Section 1400Z-2 relating to gains that may be deferred as a result of a taxpayer’s investment in a qualified opportunity fund.
October 19, 2018: The IRS issued Rev. Rul. 2018-19, which provides guidance on the requirement of original use with respect to land purchased after 2017 in qualified opportunity zones.
October 19, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandum and Chief Counsel Advice).
Special thanks to Alex Cheng-Yi Lee in our DC office for this week’s roundup.
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 17 – 21, 2018:
September 17, 2018: The Treasury Inspector General for Tax Administration (TIGTA) released a report reviewing whether the IRS complied with legal and internal guidelines governing the seizure of property for unpaid taxes.
September 17, 2018: TIGTA released a second report compiling statistical information reported by the IRS in order to provide information about how the IRS uses its compliance resources and the resulting tax collections.
September 18, 2018: The IRS published Revenue Ruling 2018-17, which provides the applicable federal interest rate for October 2018 and other interest rates.
September 19, 2018: The IRS published Revenue Procedure 2018-49, which allows taxpayers that early adopted a method of revenue recognition to change such method to one described in Section 16.11 of Revenue Procedure 2018-31. This is a very important method change that affects many taxpayers who have to comply with ASC 606.
September 20, 2018: The IRS announced in Notice 2018-72 that it intends to amend the section 871(m) regulations to delay the effective date of certain provisions.
September 21, 2018: Treasury and the IRS published proposed regulations that would remove from the section 385 regulations minimum documentation requirements that must be satisfied for certain related-party debt to be respected as such for tax purposes. We previously commented on this here.
September 21, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandum and Chief Counsel Advice).
Special thanks to Kevin Hall in our DC office for this week’s roundup.
Presented below is our summary of significant IRS guidance and relevant tax matters for the week of August 27 – 31, 2018:
August 27, 2018: The IRS announced changes to its Compliance Assurance Process (CAP) program. We posted about the changes to CAP here.
August 28, 2018: In Notice 2018-70, the IRS announced that it will issue proposed regulations clarifying the definition of a “qualifying relative” for various purposes, including the new $500 credit for certain dependents.
August 30, 2018: The Office of Management and Budget (OMB) completed its review of a proposal to remove parts of the Internal Revenue Code Section 385 regulations, which address the treatment of debt among members of an expanded affiliated group.
August 31, 2018: The IRS released Revenue Procedure 2018-58, which includes the current list of jurisdictions subject to reporting requirements for certain deposit interest paid to nonresident alien individuals.
August 31, 2018: The IRS published statistics regarding US source income payments to foreign persons reported on Form 1042-S.
August 31, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandum and Chief Counsel Advice).
Special thanks to Kevin Hall in our DC office for this week’s roundup.
Presented below is our weekly roundup for July 30 – August 3, 2018 on significant IRS guidance and relevant tax matters.
July 31, 2018: In Notice 2018-58, the IRS stated that it intends to issue regulations clarifying new rules governing section 529 contributions.
July 31, 2018: The IRS published three new frequently asked questions (Certifications and Period Reviews FAQs 14-16) regarding Foreign Account Tax Compliance Act (FATCA) compliance for qualified intermediaries and qualified derivatives dealers related to account documentation review.
August 1, 2018: The IRS issued proposed regulations addressing the one-time section 965 “transition tax” imposed on US shareholders of certain foreign corporations.
August 1, 2018: Final regulations granted taxpayers a single non-automatic 30-day extension to file Form W-2.
August 2, 2018: A report published by the Treasury Inspector General for Tax Administration (TIGTA) made eight recommendations to the IRS for improving security over taxpayer data.
August 3, 2018: The IRS released proposed regulations under section 168(k), providing guidance regarding the additional first-year depreciation deduction for certain property placed in service between September 28, 2017 and December 31, 2022. The proposed regulations address the interaction of section 168(k) and certain partnership tax rules as well as other topics.
Special thanks to Kevin Hall in our DC office for this week’s roundup.
On March 28, 2018, the Treasury Department and Internal Revenue Service (IRS) published Proposed Regulation § 301.7601-1(b)(3)(i) and (ii) which permits the IRS to hire outside specialists to assist in determining the correctness of a taxpayer’s tax liability. The Proposed Regulation also contains an exception specifically prohibiting the IRS from hiring outside attorneys to review summoned information or question witnesses providing testimony under oath.
The participation of outside attorneys became controversial during the audit of a large technology company when the IRS hired an outside law firm to augment its own resources for the transfer pricing audit of the company. On October 16, 2017, in response to the requirements of Executive Order 13789, requiring the Secretary of the Treasury to review all regulations issued after January 1, 2016, the Treasury Department and the IRS announced that they were considering proposing an amendment to Treas. Reg. § 301.7602-1(b)(3) in order to narrow the scope with respect to non-government attorneys. See our prior coverage here. (more…)
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