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Weekly IRS Roundup August 3, 2020 – August 7, 2020

by | Aug 11, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 3, 2020 – August 7, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

August 3, 2020: The IRS published a news release announcing that James Lee will become the new chief of IRS Criminal Investigation on October 1, 2020.  

August 4, 2020: The IRS published a notice and request for comments concerning Form 3800 (General Business Credit), which is the form taxpayers file to claim any of the general business credits. Comments are due on or before October 5, 2020.

August 4, 2020: The IRS published corrections to final regulations under Treasury Decision 9896 that were published in the Federal Register on Wednesday, April 8, 2020. The final regulations provide guidance regarding hybrid dividends and certain amounts paid or accrued pursuant to hybrid arrangements, which generally involve arrangements whereby US and foreign tax law classify a transaction or entity differently for tax purposes. The corrections are effective on August 4, 2020.

August 4, 2020: The IRS added new content to Internal Revenue Manual 21.7.2 concerning a new major subsection with COVID-19 related employment tax relief guidance.

 August 5, 2020: The IRS released public comments in response to Notice 2020-43, which requested comments on a proposed requirement for partnerships to use only one of two alternative methods (described in the notice) to satisfy the tax capital reporting requirement with respect to partnership taxable years that end on or after December 31, 2020. If adopted, partnerships and certain other persons would no longer be permitted to report partner capital accounts using any other method, including section 704(b) and US generally accepted accounting principles.

August 7, 2020: The IRS released Internal Revenue Bulletin 2020-33, dated August 10, 2020, containing the following: Announcement 2020-10, Announcement 2020-11; Revenue Procedure 2020-37; T.D. 9901, T.D. 9902; REG-127732-19.

August 7, 2020: The IRS announced corrections to Treasury Decision 9900, published in Internal Revenue Bulletin 2020-30 on Monday, July 20, 2020, regarding consolidated net operating loss deductions. The corrections revise the applicability date of the temporary regulations, revise the amended return filing date, and revise a specific regulation’s expiration date.

August 7, 2020: The IRS released for publication in the Federal Register final regulations under sections 162, 164, and 170 affecting taxpayers who make transfers to entities described in section 170(c) for business purposes and taxpayers who receive state or local tax credits in exchange for transfers to such entities or who receive other third party benefits in exchange for transfers to such entities. The final regulations: (1) update the regulations under section 162 to reflect current law regarding the application of section 162 to taxpayers that make payments or transfers for business purposes to entities described in section 170(c); (2) provide safe harbors under section 162 to provide certainty with respect to the treatment of payments made by business [...]

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Weekly IRS Roundup July 6 – July 10, 2020

by | Jul 14, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 6, 2020 – July 10, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

July 6, 2020: The IRS added new frequently asked questions on the treatment of grants or loans to businesses through the Coronavirus Relief Fund established by the Coronavirus Aid, Relief and Economic Security (CARES) Act. The IRS stated that a government grant is taxable because the grant generally is not excluded from the business’s gross income except in narrow circumstances. A government loan, however, generally is not included in gross income except to the extent it is forgiven. If a government forgives all or a portion of the loan, then the amount forgiven is included in gross income and taxable unless an exclusion applies. If an exclusion applies, the IRS indicated the taxpayer may lose an equivalent amount of tax attributes.

July 6, 2020: The IRS added frequently asked questions on the treatment of grants or loans to health care providers through the Provider Relief Fund established by the CARES Act. The IRS stated that payments from this fund do not qualify as a qualified disaster relief payment under section 139 of the Internal Revenue Code (IRC) and, in turn, are includible in gross income. The IRS also stated that a tax-exempt recipient generally is not subject to tax on a fund payment unless the amount is a reimbursement to an unrelated trade or business under section 511.

July 6, 2020: The IRS added content to its Large Business & International (LB&I) Active Campaign covering section 965 for individuals. In connection with the transition to a participation exemption system, certain individuals had an obligation to include in gross income (and report) their pro rata share of the untaxed earnings and profits of certain directly and indirectly owned foreign corporations. The IRS indicated it will address noncompliance through soft letters and examinations.

July 7, 2020: The IRS issued a news release reminding tax-exempt organizations that certain forms they file with the IRS are due on July 15, 2020, including Form 990. Tax-exempt organizations that need additional time to file beyond the July 15 deadline can request an automatic extension by filing Form 8868. The IRS also indicated that extending the time for filing a return does not extend the time for paying tax.

July 8, 2020: The IRS issued a news release reminding certain taxpayers to restart their tax payments by July 15. Some taxpayers took advantage of tax relief measures under the People First Initiative and did not make previously owed tax payments between March 25 and July 15. The IRS also set forth what taxpayers should do to resume their payment agreements to the IRS, including Installment Agreements, Offers in Compromise and [...]

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Weekly IRS Roundup June 15 – June 20, 2020

by | Jun 23, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 15 – June 20, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

June 19, 2020: The US Tax Court announced that the Court will resume receiving mail effective July 10, 2020. Any items currently being held by the United States Postal Service or any private delivery service will be delivered to the Court on that day.

June 19, 2020: The IRS issued proposed regulations that provide guidance for the deduction of qualified transportation fringe (QTF) and commuting expenses. As part of the Tax Cuts and Jobs Act (TCJA), taxpayers are not allowed deductions for QTF expenses or for certain commuting expenses. These proposed regulations address the elimination of the QTF deduction. The proposed regulations also provide guidance to determine the amount of QTF parking expense that is nondeductible.

June 19, 2020: The IRS released Notice 2020-50 to help retirement plan participants affected by the COVID-19 take advantage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act regarding retirement plan distributions. The CARES Act provides that qualified individuals may treat as coronavirus-related distributions up to $100,000 in distributions made from their eligible retirement plans between January 1 and December 30, 2020 without being subject to the 10% additional tax that otherwise generally applies to distributions made before an individual reaches age 59 ½. Notice 2020-50 expands the definition of who is a qualified individual to take into account additional factors such as reductions in pay, rescissions of job offers, and delayed start dates with respect to an individual, as well as adverse financial consequences to an individual arising from the impact of the COVID-19 on the individual’s spouse or household member.

June 20, 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 Emily Mussio in our Chicago office for this week’s roundup.



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The Next Normal — Tax Responses to COVID-19

by | Jun 18, 2020 |

The coronavirus (COVID-19) pandemic has thrown our personal and professional lives into a constant state of change, as we deal with social distancing, e-learning, remote working, and Zoom. In this American Bar Association article, Andrew R. Roberson, a partner in US and International Tax at McDermott Will & Emery, describes how the constant change or “next normal” rings true in the tax world as well, both for taxpayers and practitioners, as we all adapt to today’s challenges.

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Weekly IRS Roundup June 8 – June 12, 2020

by | Jun 15, 2020 |

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 8 – June 12, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

June 9, 2020:  The IRS published a reminder for taxpayers that estimated tax payments for tax year 2020, originally due April 15 and June 15, are now due July 15.  Any individual or corporation that has a quarterly estimated tax payment due has until July 15 to make that payment without penalty.

June 11, 2020:  The IRS released Notice 2020-46 to address that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation, or personal leave which their employees forgo will not be treated as compensation. Additionally, the employees will not be treated as receiving the value of the leave as income and cannot claim a deduction for the leave that they donated to their employer.

June 12, 2020:  The IRS and Treasury issued proposed regulations to amend the existing regulations to add a definition of real property to reflect statutory changes and the Tax Cuts and Jobs Act (TCJA) limiting IRC § 1031 to exchanges of real property.  Written or electronic comments and requests for a public hearing must be received by August 11, 2020.

June 12, 2020:  The IRS issued Notice 2020-49 to provide tax relief for certain taxpayers affected by the COVID-19 pandemic involved in new markets tax credit transactions under IRC § 45D(a). Specifically, the notice provides guidance for community development entities (CDEs) and qualified active low-income community businesses (QALICBs) investing and conducting businesses in low-income communities.  The notice postpones to December 31, 2020, the due dates for making investments, making reinvestments, and expending amounts for construction of real property under IRC § 45D due to be performed or expended on or after April 1, 2020, and before December 31, 2020.

June 12, 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 Emily Mussio in our Chicago office for this week’s roundup.



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Tax Court Records Accessible Again

by and | Jun 11, 2020 | ,

When the US Tax Court (Tax Court) shut down in March, the public was unable to request copies of Tax Court records. That changed effective June 1, 2020, as non-parties may now call and request copies of court records which will then be sent via email. The cost for copy requests is $0.50 per page, with a per-document cap of $3.00. The Tax Court’s press release on this subject can be found here.

Practice Point: It can be extremely beneficial to taxpayers and their advisors to see arguments being made by other taxpayers and the Internal Revenue Service in cases with similar legal issues. The ability to now directly call the Tax Court to request briefs or other filings in a docketed case, and to receive such documents electronically, is significant. Moreover, the cap of $3.00 per document may provide an incentive to request documents where the price per page, without a cap, was previously financially burdensome.



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Weekly IRS Roundup June 1 – June 5, 2020

by | Jun 8, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 1 – June 5, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

June 2, 2020: The IRS reminded taxpayers who live and work abroad that they have until July 15, 2020, to file their 2019 federal income tax return and pay any tax due. Typically, the deadline for such returns is June 15.

June 3, 2020: The IRS issued Notice 2020-42 to provide temporary relief from the physical presence requirement in Treasury Regulations § 1.401(a)-21(d)(6) for participant elections required to be witnessed by a plan representative or a notary public, including a spousal consent required under IRC § 417.

June 4, 2020: The IRS issued Notice 2020-39 and updated the Qualified Opportunity Zones frequently asked questions (FAQs). Notice 2020-39 answers questions regarding relief from certain requirements under IRC § 1400Z-2, particularly providing that if a taxpayer’s 180th day to invest in a qualified opportunity zone would have fallen on or after April 1, 2020, and before December 31, 2020, the taxpayer now has until December 31, 2020, to invest that gain into a qualified opportunity fund (QOF). In addition, Notice 2020-39 provides that the period between April 1, 2020, and December 31, 2020, is suspended for purposes of the 30-month period during which property may be substantially improved.

June 4, 2020: The IRS announced that the Office of Chief Counsel will be expanding its Virtual Settlement Days program. Settlement Days events are organized in effort to resolve US Tax Court cases by providing taxpayers not represented by counsel the opportunity to receive free tax advice from certain pro bono groups such as the Low Income Taxpayer Clinics (LITCs) and American Bar Association (ABA).Through this program, taxpayers can also discuss their Tax Court cases and resolve related tax issues with members of the IRS Office of Chief Counsel, the Independent Office of Appeals and Collection.Due to COVID-19, Settlement Days events are now virtual and allow for taxpayers and volunteers to join from any location. 

June 5, 2020: The IRS issued Notice 2020-43 to seek public comment on a proposed requirement for partnerships to use only one of two alternative methods described in Notice 2020-43 to satisfy the Tax Capital Reporting Requirement with respect to partnership taxable years that end on or after December 31, 2020. The two methods that a partnership may use to report, for each partner, are either (i) the partner’s basis in its partnership interest, reduced by the partner’s allocable share of partnership liabilities, as determined under IRC § 752 (Modified Outside Basis Method); or (ii) the partner’s share of previously taxed capital, as calculated under a modified version of Treas. Reg. § 1.743-1(d) (Modified Previously Taxed Capital Method).

June 5, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, [...]

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Tax Court Zooms into Remote Proceedings

by and | Jun 2, 2020 | ,

On May 29, 2020, the US Tax Court (Tax Court) announced that to accommodate continuing uncertainties relating to the COVID-19 pandemic, and until further notice, all court proceedings would be conducted remotely. The Tax Court also issued Administrative Order 2020-02 regarding the conduct of remote proceedings and Administrative Order 2020-03 regarding limited entries of appearance. The Orders are effective until terminated by the Tax Court.

Administrative Order 2020-02 contains sample forms, which are also available under the “Forms” tab on the Tax Court’s website, providing more information on how Tax Court proceedings will be conducted during the pandemic. The updated forms include:

The forms make clear certain requirements that are contained in the Tax Court Rules of Practice and Procedure but were not contained in a prior version of the Standing Pretrial Order. One notable change is that stipulations of fact, which are many times not filed until the day of trial, must now be filed at least 14 days before the trial commences.

Remote proceedings will be conducted using Zoomgov, and access information will be provided to the parties via a meeting identification number and a password. The parties must take steps to ensure that they and their witnesses have adequate technology and internet resources to participate in a remote proceeding. Personal Zoom accounts are not required.

Like most all court proceedings, remote proceedings will be open to the public. The Tax Court will post dial-in information on its website for each trial session, which will allow real-time audio access to proceedings to the general public.

Practice Point:  The Tax Court’s decision to conduct remote proceedings reflects the changing times. Being able to effectively present one’s case in person to a Tax Court Judge requires substantial preparation to tell the taxpayer’s story and advocate for the desired result. Taxpayers and their counsel must now prepare to do the same over videoconference, an arguably much more difficult task. We plan to explore the new rules in more detail in a future article and will keep our readers posted. Taxpayers should be mindful that the general public and the press will be able to virtually attend more court proceedings. Accordingly, your tax issues will be more open and accessible than ever before.



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Weekly IRS Roundup May 25 – May 29, 2020

by | Jun 1, 2020 | ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 25 – May 29, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

May 26, 2020: The IRS and United States Department of the Treasury issued proposed regulations to provide guidance on federal income tax withholding on certain periodic retirement and annuity payments under IRC § 3405(a).

May 26, 2020: The IRS and Treasury issued final regulations clarifying the reporting requirements under IRC § 6033, generally applicable to tax-exempt organizations.

May 26, 2020: The IRS Practice Unit titled Taxation on the Disposition of USRPI by Foreign Persons was updated to clarify that publicly traded stock of a corporation continues to not be US real property interests (USRPI) if held by a 5% or less shareholder. The 5% threshold was increased to 10% only for real estate investment trusts (REITs) under the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).

May 27, 2020: The IRS and Treasury issued Notice 2020-41 to modify prior IRS notices addressing the beginning of construction requirement for both the production tax credit for renewable energy facilities under IRC § 45 and the investment tax credit for energy property under IRC § 48.

May 27, 2020: The IRS announced that some Economic Impact Payments (EIPs) will be sent to taxpayers in the form of a prepaid debit card that will arrive in a plain envelope from “Money Network Cardholder Services.”

May 28, 2020: The IRS announced that taxpayers will be able to file Form 1040-X, Amended US Individual Income Tax Return, electronically this summer. Previously, Form 1040-X was only accepted through the mail.

May 28, 2020: The IRS and Treasury issued proposed regulations regarding the credit for carbon oxide sequestration under IRC § 45Q.

May 29, 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 Emily Mussio in our Chicago office for this week’s roundup.



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Weekly IRS Roundup May 18 – May 22, 2020

by | May 26, 2020 | , ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of May 18 – May 22, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

May 18, 2020:  The U.S. Tax Court announced that comments to the proposed amendments to the Rules of its Practice and Procedure should be emailed to Stephanie A. Servoss, Clerk of the Court, at Rules@ustaxcourt.gov. The Tax Court has not received mail since March 19, 2020.

May 18, 2020:  The IRS added approximately 3,500 phone operators to answer Economic Impact Payment (EIP) questions.

May 19, 2020:  The Large Business & International (LB&I) released information regarding the Swiss Bank Program Campaign. The program allows Swiss financial institutions to provide information on the U.S. persons with beneficial ownership of foreign financial accounts. The campaign will address noncompliance of such taxpayers.

May 20, 2020:  The IRS announced that Andy Keyso has been selected to serve as the Chief of the IRS Independent Office of Appeals, the IRS announced. For more information on Mr. Keyso and IRS Appeals, see our write-up here.

May 21, 2020:  The IRS announced that the 2020 IRS Nationwide Tax Forums will be held virtually in 2020 with a series of live-streamed webinars beginning this July. The 2020 Nationwide Tax Forums will begin on July 21 and continue through August 20.

May 22, 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 Emily Mussio in our Chicago office for this week’s roundup.



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