Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 24 – 28, 2019.

June 24, 2019: The IRS updated its frequently asked questions for Opportunity Zones page. In the updated FAQs, the IRS now poses, and answers in the affirmative, the question of whether a taxpayer can still make a valid deferral election based on an investment that was lower than the total tax code Section 1231 gain but realized within the 180-day period after the last day of the 2018 tax year under proposed regulations.

June 24, 2019: The IRS issued a technical correction to its final regulations Section 1.956-1 that acts to reduce the amount determined under tax code Section 956 with respect to certain domestic corporations. The correction updates a cross reference table in the instructions to Treas. Reg. Section 1.956-1 that had misidentified a subparagraph affected.

June 27, 2019: The IRS posted a page for General Section 965 Questions and Answers. In addition to discussing various frequently asked questions (FAQs) with regards to Section 965, the page also discusses filing transfer and consent agreements arising under Section 965(h) and Section 965(i).

June 28, 2019: The IRS issued a news release noting that it had issued proposed regulations concerning the new 1.4 percent excise tax on the net investment income of certain private colleges and universities provided for under section 4968.

June 28, 2019: The IRS issued corrections to its regulations concerning the recognition and deferral of Section 987 Gain or Loss (IRC §987) which will become effective on July 1, 2019. The corrections relate to combinations and separations of qualified business units (QBUs) subject to Section 987 and the recognition and deferral of foreign currency gain or loss with respect to a QBU subject to Section 987 in connection with certain QBU terminations and certain other transactions involving partnerships. Specifically, the corrections were made to Treas. Reg. Section 1.987-2 and Treas. Reg. Section 1.987-4 to properly identify regulation sections references. The substance of the regulations were not changed.

June 28, 2019: The IRS issued final regulations clarifying the employment tax treatment of partners in a partnership that owns a disregarded entity. The rules provide that if a partnership is the owner of an entity that is disregarded as an entity separate from its owner, the entity is not treated as a corporation for purposes of employing a partner of the partnership that owns the entity; instead, the entity is disregarded as an entity separate from the partnership for this purpose and is not the employer of any partner of the partnership that owns the entity. A partner of a partnership that owns an entity that is disregarded as an entity separate from its owner is subject to the same self-employment tax rules as a partner of a partnership that does not own an entity that is disregarded as an entity separate from its owner, according to the [...]

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Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 17 – 21, 2019.

June 18, 2019: The IRS issued a news release noting that it and the US Department of the Treasury issued proposed regulations that provide guidance for cooperatives and their patrons on calculating the deduction for qualified business income and the deduction for domestic production activities for agricultural or horticultural cooperatives and their patrons (the Section 199A(g) deduction).

June 19, 2019: The IRS released issued a news release announcing that the Electronic Tax Administration Advisory Committee (ETAAC) issued its annual report to Congress featuring recommendations focused on the prevention of identity theft and refund fraud.  The recommendations were focused on the areas of enabling and expanding the IRS-sponsored Security Summit, improving security in key areas of the tax system, and protecting and enabling taxpayers.

June 19, 2019: The IRS released a proposed revenue procedure that provides computational guidance on methods and sources of data for calculating W-2 wages for purposes of tax code Section 199A(g).  The IRS proposed three methods, which would limit the amount of the deduction available to 50% of a specified agricultural or horticultural cooperative’s W-2 wages. In addition, Revenue Procedure 2006-47 is obsoleted and Notice 2019-27 is effective on June 18, 2019.

June 20, 2019: The IRS released issued a news release National Taxpayer Advocate Nina E. Olson released her 37th and final report to Congress featuring her assessment of the key challenges facing the IRS and the Taxpayer Advocate Service (TAS) in the coming years and featuring her review of the 2019 filling season.

June 21, 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.

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 10 – 14, 2019.

June 11, 2019: The IRS issued a news release noting that it and the US Department of the Treasury issued final regulations that require taxpayers to reduce their charitable contribution deductions by the amount of any state or local tax credits they receive or expect to receive in return for those contributions.

June 13, 2019: The IRS released final regulations on discounting rules for unpaid losses and estimated salvage recoverable of insurance companies for federal income tax purposes. The final regulations update and replace existing regulations and proposed regulations to implement recent legislative changes to the Code and make a technical improvement to the derivation of loss payment patterns used for discounting.

June 13, 2019: The IRS released final regulations that allow integrating health reimbursement arrangements (HRAs) and other account-based group health plans with individual health insurance coverage or Medicare, if certain conditions are satisfied. The final regulations also set forth conditions under which certain HRAs and other account-based group health plans will be recognized as limited excepted benefits and finalize rules regarding premium tax credit eligibility for individuals offered an individual coverage HRA.

June 14, 2019: The IRS released issued a news release announcing that it and the US Department of the Treasury issued final regulations and proposed regulations concerning global intangible low-taxed income under section 951A, the foreign tax credit, the treatment of domestic partnerships for purposes of determining the subpart F income of a partner, and the treatment of income of a controlled foreign corporation subject to a high rate of foreign tax under section 951A.

June 14, 2019: The IRS released final regulations that ensure that the income of an S corporation will continue to be subject to US income tax when a nonresident alien is a deemed owner of a grantor trust that elects to be an electing small business trust. The final regulations adopt, without any changes, proposed regulations that were issued in April 2019.

June 14, 2019: The IRS released temporary regulations that act to limit the section 245A dividends received deduction for some dividends from current or former controlled foreign corporations and that limit the section 954(c)(6) exception to foreign personal holding company income for some dividends received by upper-tier CFCs from lower-tier CFCs. The text of these temporary regulations also serve as the text of the proposed regulations (REG-106282-18).

June 14, 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.

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 27 – May 31, 2019.

May 28, 2019: The IRS released Announcement 2019-05 listing recent disciplinary sanctions against attorneys, CPAs, enrolled agents, enrolled actuaries, enrolled retirement plan agents and appraisers.

May 30, 2019: The IRS released a Tax Tip advising taxpayers to include tax planning in their wedding plans. The Tax Tip focuses on advice on filing a couple’s first tax return as newlyweds.

May 31, 2019: The IRS issued a news release announcing a draft of the 2020 Form W-4, Employees Withholding Allowance Certificate. The revised form is intended to be more compatible with changes made by the 2017 Tax Cuts and Jobs Act.

May 31, 2019: The IRS released Proposed Regulations regarding withholding on certain periodic and nonperiodic distributions under Section 3405. The Proposed Regulation is based on earlier guidance under Notice 87-7 which the Treasury and IRS concluded provides an administrable standard with respect to withholding under Section 3405.

May 31, 2019: The Treasury Department and the IRS in the May 31 edition of the Federal Register requested comments concerning various forms, guidance and regulations. Topics include Treasury Decision 9452, Form 13441-A, mortgage interest and reporting requirements, and the Employee Plans Compliance Resolution System (EPCRS).

May 31, 2019: The IRS issued a notice of public hearing on proposed regulations regarding the amount of the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). The hearing is scheduled for July 10, 2019, and speaker’s outlines are due July 1, 2019.

Special thanks to Terence McAllister in our New York 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 May 20 – May 24, 2019.

May 20, 2019: The IRS issued a news release announcing the release of its Data Book for 2018. The Data Book contains a summary of IRS activities for the year spanning October 1, 2018, through September 30, 2018. The information covered includes details regarding tax returns, refunds, examinations and appeals.

May 20, 2019: The IRS released Announcement 2019-06 correcting a typographical error in Notice 2019-32.

May 21, 2019: The IRS released Revenue Procedure 2019-26 providing tables of limitations on depreciation deductions and inclusion amounts for owners or lessors of passenger automobiles first placed in service or leased by the taxpayer during calendar year 2019.

May 22, 2019: The IRS released Notice 2019-39 providing guidance regarding the issuance of tax-exempt state and local bonds under Section 103 and on the issuance of tax-exempt Indian tribal government bonds under Section 7871.

May 23, 2019: The IRS issued a news release urging taxpayers who work multiple jobs or may be adding a summer job to complete a Paycheck Cleanup. The IRS recommends using the withholding calculator on IRS.gov to complete this task.

May 23, 2019: The IRS issued final regulations reducing the amount determined under Section 956 with respect to certain domestic corporations. The regulations exclude corporations that are United States Shareholders as defined in Section 951(b) from the application of Section 956.

May 24, 2019: The IRS issued a notice requesting applications for the Internal Revenue Service Advisory Counsel. Written nominations are required on or before June 10, 2019.

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