Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 26 – 30, 2019.
August 26, 2019: The IRS released a Treasury Decision in which it issued correcting amendments to TD 9866 (i.e., the global intangible low-taxed income (GILTI) and Foreign Tax Credit Regulations pertaining to IRC §951A). The correcting amendments to Treasury Regulations Section 1.951A-2 include in the second sentence of paragraph (c)(4)(iv)(A)(2)(i), removing the language “paragraph (c)(4)(ii)(A)” and adding “paragraph (c)(4)(iii)(A)” in its place, and in the third sentence, removing the language “paragraph (c)(4)(ii)(B)” and adding “paragraph (c)(4)(iii)(B)” in its place, among other changes.
August 27, 2019: The IRS released a revenue procedure in which it added Georgia to the list of countries for which the United States has an automatic exchange of deposit interest information as related to certain nonresident alien individuals. This revenue procedure supersedes Rev. Proc. 2018-36.
August 28, 2019: The IRS issued a news release and a revenue procedure in which it announced that interest rates will remain the same for the calendar quarter beginning October 1, 2019, as they were in the prior quarter. Specifically, those rates are 5% for overpayments (4% for corporations), 2.5% for the portion of a corporate overpayment exceeding $10,000, 5% for underpayments, 7% for large corporate underpayments and, for taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.
August 29, 2019: The IRS released a revenue procedure in which it set forth 2018 annual percentages for Foreign Insurance Companies carrying on US business. Specifically, the domestic asset/liability percentage was set at 118.3% for foreign life insurance companies and 201.2% for foreign property and liability insurance companies. The revenue procedure also published domestic investment yields of 4.5% for foreign life insurance companies and 3.5% for foreign property and liability insurance companies. The IRS stated that a foreign insurance company must compute its estimated tax payments for its investment income for such taxable years by using the greater of its actual effectively connected net investment income or its minimum net investment income using these percentages, except that such company may continue to use the prior year’s percentages, as published in Revenue Procedure 2018-45, if the due date of an installment is less than 20 days after the current procedure is published in the Internal Revenue Bulletin.
August 30, 2019: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Alex Ruff in our Chicago office for this week’s roundup.
