disability-related expenses Archives

Weekly IRS Roundup December 12 – December 16, 2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 12, 2022 – December 16, 2022.

December 12, 2022: The IRS released Internal Revenue Bulletin 2022-50, which highlights the following:

Revenue Procedure 2022-41: This guidance specifies when information shown on an income tax return will be an adequate disclosure for purposes of reducing an understatement of income tax under Section 6662(d) and for purposes of avoiding the Section 6694(a) preparer penalty. This revenue procedure updates Revenue Procedure 2021-52 and applies to any income tax return filed on 2022 tax forms for a taxable year beginning in 2022 and any income tax return filed in 2023 on 2022 tax forms for short taxable years beginning in 2023.

December 12, 2022: The IRS reminded people over the age of 72 to start withdrawals from individual retirement arrangements (IRAs) and retirement plans in order to avoid penalties. Required minimum distributions (RMDs) are the minimum amounts that many retirement plan and IRA account owners must withdraw annually after they reach age 72. Account owners can delay taking their first RMD until April 1 following the later of the calendar year in which they reach age 72 or, with a workplace retirement plan, when they retire. RMDs are taxable income and may be subject to penalties if not timely taken.

December 12, 2022: The IRS and the US Department of the Treasury (Treasury) announced a new revenue procedure that sets out key processes for manufacturers and sellers of clean vehicles. Revenue Procedure 2022-42 provides guidance on new rules added as part of the Inflation Reduction Act of 2022 on how to enter into a written agreement with the IRS to provide periodic written reports containing specified information related to a manufactured clean vehicle. The revenue procedure also provides the procedures for people selling vehicles to report information to the IRS in order for the vehicle to be eligible for the credit.

December 13, 2022: The IRS urged families and people paying for disability-related expenses to consider using an Achieving a Better Life Experience (ABLE) savings account. ABLE accounts do not affect a person’s eligibility for government assistance programs and can also provide tax advantages.

December 13, 2022: The IRS released Revenue Procedure 2022-43, which sets out the final qualified intermediary withholding agreement (QI agreement) entered into under Section 1.1441-1(e)(5) of the regulations, which begins on January 1, 2023. The QI agreement allows certain people to enter into an agreement with the IRS to simplify their obligations as withholding agents and as payors for amounts paid to their account holders and allows certain people to act as qualified derivatives dealers and assume primary withholding and reporting responsibilities on all dividend equivalent payments they make.

December 14, 2022: The IRS Independent Office of Appeals selected Elizabeth (Liz) [...]

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Weekly IRS Roundup July 25 – July 29, 2022

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of July 25, 2022 – July 29, 2022. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

July 25, 2022: The IRS released Internal Revenue Bulletin 2022-30, which highlights the following:

Employee Plans: Revenue Ruling 2022-13 addresses the application of section 432(b)(7) in the case of a merger of a multiemployer defined benefit pension plan that receives special financial assistance (SFA) from the Pension Benefit Guaranty Corporation into a multiemployer defined benefit pension plan that does not receive SFA.

Estate Tax: Revenue Procedure 2022-32 provides a simplified method for certain estates to receive a time extension for filing a return before the fifth anniversary of the decedent’s death to elect portability of the deceased spousal unused exclusion amount. This revenue procedure applies to estates that are not normally required to file an estate tax return because the value falls under the filing threshold.

Income Tax: REG 130675-17 includes proposed regulations that define the term “foreign currency contract” to include only foreign currency forward contracts.

July 25, 2022: The Treasury Inspector General for Tax Administration (TIGTA) released its report, American Rescue Plan Act: Assessment of the Child Tax Credit Update Portal’s Capabilities and Related Processes. In January, TIGTA made recommendations to the IRS for improving and correcting the Child Tax Credit website. TIGTA also recommended that the IRS develop a reconciliation process for undeliverable checks. This report confirms that the IRS followed and implemented both recommendations.

July 25, 2022: The IRS asked for comments on Form 6781, Gains and Losses from Section 1256 Contracts and Straddles, which is used to calculate gains and losses from section 1256 contracts and straddles.

July 25, 2022: The IRS provided a status update on the Income Verification Express Service (IVES) program. During the third week of July, IVES processed Acknowledgments for requests dated through July 6, 2022, and Transcripts/Rejection Notices for requests dated through June 27, 2022. The IRS also reminded IVES participants that starting August 16, 2022, only the new coversheet from January 1, 2022, will be accepted.

July 25, 2022: The IRS released Tax Tip 2022-112, reminding people with disabilities to use the “Achieving a Better Life Experience” account to help pay qualified disability-related expenses. The tax-advantaged savings account does not affect their eligibility for government assistance programs.

July 26, 2022: The IRS released Tax Tip 2022-113, promoting its IRS2Go app to help people find IRS tools and resources faster and with less scrolling. The IRS2Go app works on mobile devices to check refund statuses and find tax help.

July 26, 2022: The IRS announced a warning for tax professionals [...]

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