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Weekly IRS Roundup December 14 – December 18, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 14 – December 18, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

December 14, 2020: The IRS released Notice 2020-88 updating and amplifying procedures for Phase III of the section 48A advanced coal credit.

December 16, 2020: The IRS issued Revenue Ruling 21-01 providing various rates for determining the issue price of certain debt instruments issued for property.

December 16, 2020: The IRS issued Notice 21-01 delaying mandatory e-filing of Form 4720 by private foundations and announcing certain other changes.

December 18, 2020: The IRS released TD 9932 containing final regulations under Section 162(m) related to the employer deduction for certain employee remuneration in excess of $1 million.

December 18, 2020: The IRS released Internal Revenue Bulletin 2020-52, dated December 21, 2020, containing the following highlights: Rev. Rul. 2020-81 (Administrative); TD 9912 (Administrative); TD 9933 (Exempt Organizations); TD 9934 (Income Tax); TD 9935 (Income Tax).

December 18, 2020: The IRS released Practice Units on “Determining Liability Allocations” and “Recourse vs. Nonrecourse Liabilities” relating to partnership audits.

December 18, 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 20 – 24, 2018

Presented below is our summary of significant IRS guidance and relevant tax matters for the week of August 20 – 24, 2018:

August 21, 2018: The IRS and Treasury released Notice 2018-67, which provides guidance regarding separately calculating the unrelated business taxable income (UBTI) of each trade or business conducted by a tax-exempt entity. Section 512(a)(6), enacted as part of tax reform, requires this separate calculation by tax-exempt organizations with more than one unrelated trade or business.

August 21, 2018: The IRS and Treasury released Notice 2018-68, which provides guidance regarding new section 162(m). Section 162(m), enacted as part of tax reform, limits the deduction for compensation paid by a publicly traded corporation to a covered employee. The notice provides guidance regarding the “grandfather” exception for certain compensation arrangements in effect on November 2, 2017. See our commentary for more information.

August 22, 2018: The IRS released Revenue Procedure 2018-44, which provides guidance regarding accounting method changing resulting from the revocation or termination of an entity’s S corporation status. Revenue Procedure 2018-44 adds such accounting method changes to the list of “automatic changes” listed in Revenue Procedure 2018-31.

August 22, 2018: The IRS published a draft Form 8992 for computing global low-taxed intangible income and a draft Form 8993 for computing foreign derived intangible income.

August 23, 2018: The IRS published proposed regulations providing guidance regarding the availability of a charitable deduction when the taxpayer also receives (or expects to receive) a state or local tax credit for the contribution.

August 24, 2018: The IRS made it clear that US citizens and residents that are contractors or employees of contractors supporting US Armed Forces are eligible for the section 911 foreign earned income exclusion.

August 24, 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.




IRS Issues Long-Awaited Initial Guidance under Section 162(m)

On August 21, 2018, the IRS issued guidance regarding recent statutory changes made to Section 162(m) of the Internal Revenue Code. Overall, Notice 2018-68 strictly interprets the Section 162(m) grandfathering rule under the Tax Cuts and Jobs Act.

Public companies and other issuers subject to these deduction limitations will want to closely consider this guidance in connection with filing upcoming periodic reports with securities regulators. Further action to support existing tax positions or adjustments to deferred tax asset reporting in financial statements may be warranted in light of this guidance.

Access the full article.




Internal Revenue Service Updates Golden Parachute Payments Audit Technique Guide, Signaling Key Items IRS May Review on Audit

In early 2017, the IRS updated its Golden Parachute Payments Audit Technique Guide for the first time since its 2005 issuance. While intended as an internal reference for IRS agents conducting golden parachute examinations, the Audit Technique Guide offers valuable insight for both public and private companies, and recipients of golden parachute payments, into how IRS agents are likely to approach golden parachutes when conducting an audit.

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