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Weekly IRS Roundup July 27 – July 31, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 27, 2020 – July 31, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

July 28, 2020: The IRS issued final regulations providing guidance about the limitation on the deduction for business interest expense after amendment of the Internal Revenue Code (Code) by the Tax Cuts and Jobs Act and the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The regulations provide guidance to taxpayers on how to calculate the limitation, what constitutes interest for purposes of the limitation, which taxpayers and trades or businesses are subject to the limitation and how the limitation applies in consolidated group, partnership, international and other contexts.

July 28, 2020: The IRS published a notice of proposed rulemaking concerning rules that provide additional guidance on various business interest expense deduction limitation issues not addressed in the final regulations, including more complex issues related to the amendments made by the CARES Act.

July 28, 2020: The IRS added frequently asked questions regarding the aggregation rules under section 448(c)(2) that apply to the section 163(j) small business exemption.

July 29, 2020: The IRS posted a practice unit on issues concerning the receipt of dividends or interest from a related controlled foreign corporation.

July 29, 2020: The IRS posted a practice unit on accuracy-related penalties under section 6662.

July 29, 2020: The IRS published a notice of proposed rulemaking concerning regulations to implement legislative changes to sections 263A, 448, 460 and 471 that simplify the application of those tax accounting provisions for certain businesses having average annual gross receipts that do not exceed $25 million, adjusted for inflation. The notice also contains proposed regulations regarding certain special accounting rules for long-term contracts under section 460 to implement legislative changes applicable to corporate taxpayers. The proposed regulations generally affect taxpayers with average annual gross receipts of not more than $25 million (adjusted for inflation). The IRS also requested comments regarding the application of section 460 (or other special methods of accounting) to a contract with income that is accounted for in part under section 460 (or other special method) and in part under section 451. Comments must be received by September 14, 2020.

July 31, 2020: The IRS published a notice of proposed rulemaking concerning proposed regulations that provide guidance under section 1061. Section 1061 recharacterizes certain net long-term capital gains of a partner that holds one or more applicable partnership interests as short-term capital gains. The regulations also amend existing regulations on holding periods to clarify the holding period of a partner’s interest in a partnership that includes in whole or in part an applicable partnership interest and/or a profits interest. The regulations affect taxpayers who directly or indirectly [...]

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Weekly IRS Roundup September 2 – 6, 2019

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 2 – 6, 2019.

September 3, 2019: The IRS issued a notice in which it released the applicable amount for the health care annual fee imposed on covered entities for 2020. That amount is $15,522,820,037. The applicable amount is determined by multiplying the fee for the 2018 base year ($14,300,000,000) by premium adjustment percentage for 2020 (1.0855118907) and rounded to the nearest dollar, the IRS stated. The fee will apply in 2020 unless legislation extends the fee suspension in place for 2019.

September 3, 2019: The IRS issued two treasury decisions, here and here, which each contain corrections to final regulations regarding the designation and authority of the partnership representative under the centralized partnership audit regime.

September 5, 2019: The IRS issued a proposed regulation in which it introduced proposed rules that would provide guidance on the timing of income inclusion under tax code Section 451 of advance payments for goods, services, and other items. The proposed regulations would provide both a deferral method of accounting for taxpayers that do not have an applicable financial statement (AFS), in addition to taxpayers that have an AFS. The proposed regulations would provide a definition of advance payment, and advance payment acceleration provisions. The proposed regulations, however, would not provide an accelerated cost offset, as suggested in some comments.

September 5, 2019: The IRS issued a proposed regulation in which it introduced proposed rules regarding the timing of income inclusion under tax code Section 451. The proposed rules would provide that the AFS income inclusion rule generally applies to accrual method taxpayers with an AFS when the timing of income inclusion for one or more items of income is determined using the all events test. The AFS must cover the entire year, the IRS noted. The proposed regulations would define what is an AFS.

September 6, 2019: The IRS issued a proposed regulation in which it introduced proposed rules that would update information reporting regulations under tax code Section 6033 that are generally applicable to organizations exempt from tax under Section 501(a) to reflect statutory amendments and reporting relief announced through IRS guidance that have been made since the current regulations were adopted, particularly with respect to tax-exempt organizations required to file an annual Form 990 or 990-EZ. Specifically, the proposed regulations would include adding items in Section 6033(b)(10) and Section 6033(b)(11) to the list of items required to be reported, adding more statutory reporting requirements for controlling organizations, sponsoring organizations, and supporting organizations, amending the gross receipts threshold, clarification on Section 527 organizations, and requiring only Section 501(c)(3) and Section 527 organizations to continue providing names and addresses of contributors.

September 6, 2019: The IRS issued a revenue procedure to comply with proposed regulations (REG-104870-18 and REG-104554-18), affecting Treasury Regulations Section 1.451-3 and Regulations Section 1.451-8. The revenue procedure serves to modify the procedure [...]

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