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Weekly IRS Roundup May 31 – June 3, 2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 31, 2022 – June 3, 2022. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

May 31, 2022: The IRS issued a press release, reminding taxpayers living and working outside the United States that their 2021 federal income tax return is due on June 15, 2022. The deadline applies to both US citizens and resident aliens abroad, including those with dual citizenship. The press release also contains other information to assist said taxpayers with their filings.

June 1, 2022: The IRS issued the first part of its “Dirty Dozen” tax scams for 2022, focusing on the following items:

  • Use of Charitable Remainder Annuity Trust (CRAT) to Eliminate Taxable Gain. In this transaction, appreciated property is transferred to a CRAT. Taxpayers improperly claim the transfer of the appreciated assets to the CRAT, which in and of itself gives those assets a step-up in basis to fair market value as if they had been sold to the trust. The CRAT then sells the property but does not recognize gain because of the claimed step-up in basis. Next, the CRAT uses the proceeds to purchase a single premium immediate annuity (SPIA). The beneficiary reports, as income, only a small portion of the annuity received from the SPIA. Through a misapplication of the law relating to CRATs, the beneficiary treats the remaining payment as an excluded portion representing a return of investment for which no tax is due. Taxpayers seek to achieve this inaccurate result by misapplying the rules under sections 72 and 664.
  • Maltese (or Other Foreign) Pension Arrangements Misusing Treaty. In these transactions, US citizens or US residents attempt to avoid US tax by making contributions to certain foreign individual retirement arrangements in Malta (or possibly other foreign countries). In these transactions, the individual typically lacks a local connection, and local law allows contributions in a form other than cash or does not limit the amount of contributions by reference to income earned from employment or self-employment activities. By improperly asserting that the foreign arrangement is a “pension fund” for US tax treaty purposes, the US taxpayer misconstrues the relevant treaty to improperly claim an exemption from US income tax on earnings in, and distributions from, the foreign arrangement.
  • Puerto Rican and Other Foreign Captive Insurance. In these transactions, US owners of closely held entities participate in a purported insurance arrangement with a Puerto Rican or other foreign corporation with cell arrangements or segregated asset plans in which the US owner has a financial interest. The US-based individual or entity claims deductions for the cost of “insurance coverage” provided by a fronting carrier, which reinsures the “coverage” with the foreign corporation. The characteristics of the purported insurance arrangements typically include one or more of the following: implausible risks covered, non-arm’s length pricing and lack of [...]

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Weekly IRS Roundup January 30 – February 5, 2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of January 30, 2022 – February 5, 2022. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

January 31, 2022: The IRS issued Revenue Procedure 2022-14, providing updates to the list of accounting method changes to which the automatic change procedures of Revenue Procedure 2015-33, as modified, apply.

January 31, 2022: The IRS issued a news release in advance of the 2021 filing season, providing a Fact Sheet that contains answers to frequently asked questions (FAQs) regarding the Child Tax Credit as expanded by the American Rescue Plan Act of 2021 (ARPA).

February 1, 2022: The IRS issued a news release, providing an update to the Fact Sheet released the previous day regarding the Child Tax Credit as expanded by ARPA.

February 1, 2022: The IRS issued a news release, setting forth certain administrative and logistical issues for taxpayers to consider in the process of filing an individual income tax return for 2021.

February 2, 2022: The IRS issued a news release, providing an update to a Fact Sheet containing answers to FAQs regarding the 2020 Recovery Rebate Credit, enacted as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act.

February 3, 2022: The IRS issued a news release warning taxpayers to watch out for certain common tax scams and providing resources for victims of tax-related identity theft.

February 4, 2022: The IRS issued a news release announcing special Saturday hours at certain IRS Taxpayer Assistance Centers around the country to provide in-person assistance to taxpayers during the 2021 filing season.

February 4, 2022: The IRS issued an Action on Decision announcing its nonacquiescence to the holding in Quezada v. IRS, 982 F.3d 931 (5th Cir. 2020). The ruling held that the period of limitations on assessing backup withholding liability begins to run when the taxpayer files Forms 1040 and 1099-MISC that omit payee taxpayer identification numbers.

February 4, 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 March 4 – 8, 2019

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 4 – 8, 2019.

March 4, 2019: The IRS issued proposed regulations under Section 250 of the Code for determining domestic corporations’ deductions for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).

March 4, 2019: The IRS issued a news release kicking off the annual list of what the agency terms the most prevalent or “Dirty Dozen” tax scams.

March 5, 2019: The IRS released Notice 2019-18 informing taxpayers that the Treasury Department and the IRS no longer intend to amend the required minimum distribution regulations under § 401(a)(9) of the Internal Revenue Code.

March 6, 2019: The IRS scheduled a public hearing for March 25, 2019, on proposed regulations relating to the Base Erosion and Anti-Abuse Tax.

March 6, 2019: The IRS released Notice 2019-20 providing a waiver of penalties under Sections 6722 and 6698 to certain partnerships for the 2018 tax year.

March 8, 2019: The IRS issued a news release postponing tax return filing and payment deadlines for victims of tornadoes and severe storms in parts of Alabama.

March 9, 2019: The IRS issued a news release advising business owners and self-employed individuals that Publication 5318 contains information of recent tax law changes that might affect their bottom line.

March 9, 2019: The IRS scheduled a March 20 public hearing on proposed regulations on hybrid entities and transactions under section 267A, and scheduled an April 10 public hearing on proposed regulations regarding withholding requirements.

Special thanks to Terence McAllister in our New York office for this week’s roundup.




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