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Weekly IRS Roundup September 2 – September 6, 2024

by Kevin Spencer, Evan Walters and Sama Kaseer | Sep 13, 2024 | IRS Guidance, Tax Reform

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 2, 2024 – September 6, 2024.

September 2, 2024: The IRS released Internal Revenue Bulletin 2024-36, which includes Notice 2024-63. The notice provides guidance on matching contributions for qualified student loan payments under § 401(k) of the Internal Revenue Code (Code) and other similar retirement plans. This guidance aims to help plan sponsors with setting up these programs for plan years beginning after December 31, 2024, until proposed regulations are issued.

September 3, 2024: The IRS reminded taxpayers to develop or update their emergency preparedness plans as part of National Preparedness Month, especially with the peak of hurricane season imminent and elevated wildfire risks. Key steps include protecting and duplicating essential documents, creating property inventories, and knowing how to reconstruct records if needed.

September 4, 2024: The IRS announced it is using funding from the Inflation Reduction Act of 2022 (IRA) to modernize taxpayer services with new online tools, including the IRS Energy Credits Online platform, which simplifies the process for claiming clean energy credits. These improvements aim to save taxpayers time and money while enhancing compliance and fraud mitigation.

September 4, 2024: The IRS released Revenue Procedure 2024-34, which modifies Revenue Procedure 2024-23 to provide procedures under Code § 446 for obtaining automatic consent to change accounting methods for Code § 174 research or experimental expenditures paid or incurred after December 31, 2021. The new revenue procedure also limits audit protection for these expenditures if changes are not made in the applicable tax year.

September 4, 2024: The IRS reminded tax professionals to be vigilant for signs of data breaches, such as slow computer performance, unexpected cursor movements, and clients receiving IRS authentication letters for returns they did not file. Immediate reporting to the IRS and proactive measures, such as obtaining an Identity Protection PIN, are crucial to mitigate the impact of data theft.

September 5, 2024: The IRS encouraged taxpayers to use Identity Protection PINs and establish an IRS online account to safeguard against identity theft and fraud. These tools help protect personal and financial information from being stolen by scammers.

September 5, 2024: The IRS reminded taxpayers that the deadline for the third quarter estimated tax payment is September 16, 2024. Taxpayers in disaster-affected areas in 17 US states, Puerto Rico, and the Virgin Islands may qualify for an extended deadline.

September 5, 2024: The IRS released Notice 2024-65, requesting public comments on the implementation of Saver’s Match contributions, a new initiative under Code § 6433 aimed at boosting retirement savings for low-to-moderate-income individuals. Public comments are sought on various aspects, including eligibility, claiming processes, and outreach to traditionally marginalized communities, with a deadline of November 4, 2024.

September 6, 2024: The IRS announced [...]

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Weekly IRS Roundup April 8 – April 12, 2024

by Kevin Spencer, Evan Walters and Jeremy Kass | Apr 15, 2024 | IRS Guidance, Tax Reform, Tax Refunds

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of April 8, 2024 – April 12, 2024.

April 8, 2024: The IRS released Internal Revenue Bulletin 2024-15, which includes the following:

Announcement 2024-15, which revokes the § 501(c)(3) determination for specified organizations and stipulates that contributions made to said organizations by individual donors are no longer deductible under § 170(b)(1)(A) of the Internal Revenue Code (Code).
Notice 2024-31, which provides adjustments to the limitation on housing expenses for purposes of Code Section 911 for specific locations for 2024.
Revenue Procedure 2024-17, which provides a waiver under Code Section 911(d)(4) concerning time requirements for individuals who must leave a foreign country because of war, civil unrest or similar adverse conditions and are electing to exclude their foreign earned income. The revenue procedure also adds Ukraine, Belarus, Sudan, Haiti, Niger and Iraq to the list of waiver countries for tax year 2023 for which the minimum time requirements are waived.
Revenue Procedure 2024-18, which supplements Revenue Procedure 2023-32 by publishing amounts of unused housing credit carryovers allocated to qualified states under Code Section 42(h)(3)(D) for calendar year 2023 (in addition to those amounts published in Revenue Procedure 2023-32).
Final regulations, which describe rules for the elective payment of Inflation Reduction Act of 2022 tax credit amounts in a taxable year, including definitions and special rules applicable to partnerships and S corporations and regarding repayment of excessive payments. The regulations also describe rules related to a required IRS pre-filing registration process.
Final regulations, which describe rules for the elective payment of the advanced manufacturing investment credit under the Creating Helpful Incentives to Produce Semiconductors Act of 2022, including special rules applicable to partnerships and S corporations, repayment of excessive payments, and basis reduction and recapture. The regulations also describe rules related to a required IRS pre-filing registration process.

April 8, 2024: The IRS warned taxpayers about bad tax information on social media that can potentially lead to identity theft and tax problems.

April 9, 2024: The IRS warned tax professionals and businesses to remain vigilant and protect themselves against a continuing barrage of email spearfishing attempts, especially one particular type known as “new client” scams where identity thieves pose as potential clients using fake emails in hopes of stealing valuable information.

April 9, 2024: The IRS reminded taxpayers that its Direct File pilot is open to eligible taxpayers in 12 pilot states and allows the filing of 2023 federal tax returns online for free and directly with the IRS.

April 9, 2024: The IRS released proposed regulations that would implement the statutory netting rule, which reduces the aggregate fair market value of stock repurchased by a taxpayer during a certain taxable year. Additionally, [...]

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Weekly IRS Roundup March 18 – March 22, 2024

by Kevin Spencer, Evan Walters and Jeremy Kass | Mar 28, 2024 | IRS Guidance, Tax Reform, Tax Refunds

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 18, 2024 – March 22, 2024.

March 18, 2024: The IRS released Internal Revenue Bulletin 2024-12, which includes the following:

Notice 2024-26, which announces that withholding agents (both US and foreign persons) are administratively exempt from having to electronically file Forms 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, which are required to be filed in calendar year 2024. Withholding agents who are foreign persons are administratively exempt in calendar year 2025 as well.
Announcement 2024-14, which revokes the § 501(c)(3) determination for Uplifting Her Inc. and stipulates that contributions made to the organization by individual donors are no longer deductible under § 170(b)(1)(A) of the Internal Revenue Code (Code).
Notice 2024-25, which provides population figures to use in calculating the 2024 calendar year population-based component of the state housing credit ceiling under § 42(h)(3)(C)(ii), the 2024 calendar year volume cap under § 146, and the 2024 volume limit under § 142(k)(5) of the Code.
Notice 2024-27, which requests additional comments on any situation in which an election under § 6417(a) of the Code could be made for a credit that was purchased in a transfer for which an election under § 6418(a) is made.
Revenue Procedure 2024-15, which modifies Revenue Procedure 2005-62 by expanding the definition of “public utility” to include all public utilities, not just investor-owned utilities, and changes the definition of a “qualifying securitization” to allow payments to be provided at least annually. The revenue procedure also sets forth the manner in which a public utility may treat certain legislatively authorized securitization transactions involving the issuance of debt instruments by a qualifying state financing entity, which is entered into by the public utility to recover specified costs through a non-bypassable surcharge to customers within the utility’s historic service area.

March 18, 2024: The IRS reminded taxpayers of the various ways to prevent typical errors on their federal tax returns to help speed up potential refunds, including using electronic filing, keeping copies of tax returns and ensuring the filing status is correct.

March 19, 2024: The IRS released Revenue Procedure 2024-17, which provides that war, civil unrest or similar adverse conditions precluded the normal conduct of business in Ukraine, Belarus, Sudan, Haiti, Niger and Iraq on or after various 2023 dates and, therefore, individuals with established residency or physical presence on or before the relevant dates are eligible for income exclusion under § 911(d)(1) of the Code.

March 19, 2024: The IRS released Notice 2024-29, which provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), the 24-month average segment rates used under § 430(h)(2), the interest rate on 30-year Treasury securities under § 417I(3)(A)(ii)(II) as in [...]

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Weekly IRS Roundup September 18 – September 22, 2023

by Evan Walters | Sep 25, 2023 | IRS Guidance, Tax Reform, Tax Refunds

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 18, 2023 – September 22, 2023.

September 18, 2023: The IRS released Internal Revenue Bulletin 2023-38, which includes the following:

Notice 2023-56 describes rules that determine the federal income tax consequences of refunds for state or local taxes and certain other payments made by state or local governments to individuals (for additional information, see IRS Outlines Reporting Requirements for Cryptocurrency “Brokers”).
Proposed regulations addressing information reporting, determining amount realized and basis, and backup withholding for sales and exchanges of digital assets.

September 18, 2023: The IRS published Tax Tip 2023-111, describing different types of third-party representatives.

September 19, 2023: The IRS published Tax Tip 2023-112, describing how taxpayers can be certain they are communicating with the IRS as opposed to scammers purporting to represent the IRS.

September 19, 2023: The IRS reminded individuals and businesses in parts of Alabama, California and Georgia that their 2022 federal income tax returns and tax payments are due October 16, 2023. The original due date for these returns was postponed because of natural disasters.

September 19, 2023: The IRS has selected eight new members for the Electronic Tax Administration Advisory Committee (ETAAC), which is a public forum for the discussion of electronic tax administration issues. ETAAC members work closely with the Security Summit, a joint effort of the IRS, state tax administrators and the nation’s tax industry to fight identity theft and refund fraud.

September 20, 2023: The IRS published Tax Tip 2023-113, discussing the expanded tax credit for contractors who build energy-efficient homes.

September 20, 2023: The IRS announced plans to establish a special area that will focus on large or complex pass-through entities. The new work unit will be housed in the IRS Large Business and International (LB&I) division.

September 22, 2023: The IRS is requesting comments on Revenue Procedure 2004-47, which permits taxpayers who failed to make a reverse qualified terminable interest property (QTIP) election on an estate tax return to file certain documents with the Cincinnati Service Center directly to request relief in lieu of requesting a private letter ruling. Comments are invited on:

Whether the collection of information is necessary for the proper performance of the agency’s functions, including whether the information has practical utility
The accuracy of the agency’s estimate for the burden of the information collection
Ways to enhance the quality, utility and clarity of the information to be collected
Ways to minimize the burden of the information collection on other forms of information technology
Estimates for capital or startup costs and costs of operation, maintenance and purchase of services to provide information.

September 22, 2023: The IRS released its weekly list of written [...]

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Weekly IRS Roundup September 11 – September 15, 2023

by Evan Walters | Sep 19, 2023 | IRS Guidance, Tax Reform, Tax Refunds

Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 11, 2023 – September 15, 2023.

September 11, 2023: The IRS released Internal Revenue Bulletin 2023-37, which includes the following:

Revenue Ruling 2023-16 provides the applicable federal rates for September 2023.
Revenue Ruling 2023-17 sets forth the underpayment and overpayment interest rates under Code Section 6621 for the calendar quarter beginning October 1, 2023.
Revenue Procedure 2023-29 provides the applicable percentage table used to calculate the premium tax credit under Code Section 36B.
Notice 2023-62 announces a two-year administrative transition period with respect to the requirement under Code Section 603 that catch-up contributions made on behalf of certain eligible participants be designated as Roth contributions. The notice also requests comments for further guidance with respect to Code Section 603.
Announcement 2023-25 and Announcement 2023-26 revoke tax-exempt classification for specified organizations.
Announcement 2023-28 corrects citations in Revenue Procedure 2023-27.

September 12, 2023: The IRS released Notice 2023-64, which provides interim guidance on the corporate alternative minimum tax (CAMT). The notice lists financial statements that meet the definition of an applicable financial statement, provides general rules for determining “financial statement income” and includes guidance on when corporations are subject to the CAMT. Notice 2023-64 supplements and clarifies Notice 2023-07 and Notice 2023-20.

September 12, 2023: The IRS released Revenue Procedure 2023-31, providing guidance on Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, and Form 5500-EZ, Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan, which must be filed for plan years beginning on or after January 1, 2024. Revenue Procedure 2023-31 supersedes Revenue Procedure 2015-47.

September 12, 2023: The IRS published Tax Tip 2023-110, advising taxpayers to look out for scammers posing as charities and to ensure their donations are going to legitimate charitable organizations.

September 13, 2023: The IRS extended tax relief to individuals and businesses impacted by Hurricane Idalia in 28 counties in Georgia. As a result, affected individuals filing personal income tax returns on extensions expiring October 16, 2023, calendar-year partnerships and S corporations whose extensions expire on October 16, 2023, and calendar-year corporations whose 2022 extensions expire on November 15, 2023, now have until February 15, 2024, to file returns and pay related taxes.

September 14, 2023: The IRS announced an immediate moratorium through at least the end of the year on processing new claims for the Employee Retention Credit (ERC). The moratorium is in response to promoters who have aggressively marketed the credit to businesses without regard for their eligibility. Hundreds of criminal cases related to ERC claims are being worked, [...]

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IRS Appeals Is Looking for Suggestions on Improving Conference Access

by Kevin Spencer and Sarah M. Raben | May 12, 2023 | IRS Appeals, IRS Guidance

The Internal Revenue Service (IRS) has invited suggestions on improving conference options at the Independent Office of Appeals (IRS Appeals) for taxpayers and representatives who are not located near an IRS Appeals office. Specifically, IRS Appeals is inviting comments on:

Revising or replacing the “circuit riding” policy in IRM 8.6.1.5.1.1 to expand opportunities for timely in-person conferences for taxpayers living in certain states
Facilitating participation at in-person conferences when taxpayers and their representatives are not co-located
Best practices for conducting hybrid conferences, where some participants meet in person and others join by video or telephone
If a case must be transferred within IRS Appeals to facilitate an in-person conference, how best to avoid substantial delay in resolving the underlying tax dispute and
Encouraging participation in in-person and video conferences by taxpayers in historically marginalized communities or with limited English proficiency and ensuring accessibility by persons with disabilities.

Comments should be sent to ap.taxpayer.experience@irs.gov by July 10 for consideration.

Practice Point: COVID-19 prompted many modernizations at the IRS, including the expansion of remote technology resources. Taxpayers get to choose how to interact with IRS Appeals, but that choice, whether via telephone, video conference or in person, could impact their experience. Requests like these by the IRS are valuable opportunities that can affect how IRS Appeals operates in the future.

Weekly IRS Roundup January 9 – January 13, 2023

by McDermott Will & Emery | Jan 17, 2023 | IRS Guidance, Tax Reform, Tax Refunds

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of January 9, 2023 – January 13, 2023.

January 9, 2023: The IRS released Internal Revenue Bulletin 2023-2, which highlights the following:

Announcement 2023-2: This announcement provides transitional guidance with respect to the reporting of information on digital assets. Specifically, brokers are not required to report additional information on the disposition of digital assets until final regulations under Sections 6045 and 6045A are issued.

Notice 2023-8: This notice provides guidance for brokers to comply with the provisions of the final regulations under Section 1446(f) and certain provisions of the final regulations that apply to Section 1446(a) that relate to withholding on the transfer of an interest in a publicly traded partnership.

Revenue Rule 2023-1: This revenue ruling provides the applicable federal rates for federal income tax purposes for January 2023. The short-term federal interest rate will decrease to 4.50%, the mid-term rate will drop to 3.85% and the long-term rate will fall to 3.84%.

Treasury Decision 9970: This document includes final regulations that provide an automatic extension for providers of minimum essential coverage (including health insurance issuers, self-insured employers and government agencies) to furnish individual statements regarding such coverage and an alternative method for furnishing individual statements when the individual shared responsibility payment amount is zero. The final regulations also provide an automatic extension for applicable large employers to furnish statements relating to health insurance that they offer to their full-time employees.

Notice 2023-5: This notice provides updates on the corporate bond monthly yield curve, the corresponding spot segment rates and the 24-month average segment rates under Section 430(h)(2). This notice also provides guidance on the interest rate for 30-year Treasury securities as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate.

Notice 2023-4: This notice provides the percentage increase for calculating the qualifying payment amounts for items and services furnished during 2023 with respect to Sections 9816 and 9817 of the Internal Revenue Code, Sections 716 and 717 of the Employee Retirement Income Security Act of 1974 and Sections 2799A-1 and 2799A-2 of the Public Health Service Act.

Notice 2023-06: This notice explains the requirements for fuel to be eligible for the sustainable aviation fuel (SAF) credit, how to claim the credit and who must be registered. The SAF credit was created by the Inflation Reduction Act of 2022 and applies to a qualified fuel mixture containing SAF for certain uses or sales in the 2023 and 2024 calendar years.

January 9, 2023: The IRS released Tax Tip 2023-02, advising people to hang up if scammers call during tax season. The IRS says it will never (1) call to demand immediate payment using [...]

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Weekly IRS Roundup December 5 – December 9, 2022

by McDermott Will & Emery | Dec 12, 2022 | IRS Guidance, Tax Reform, Tax Refunds

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 5, 2022 – December 9, 2022.

December 5, 2022: The IRS released Internal Revenue Bulletin 2022-49, which highlights the following:

Revenue Procedure 2022-39: This revenue procedure obsoletes Revenue Procedure 94-69, 1994-2 C.B. 804, and sets out the procedures for eligible taxpayers to file an amended return under Section 1.6664-2(c)(4)(ii) of the regulations. This revenue procedure also sets out the procedures for eligible taxpayers to avoid Sections 6662(b)(1) and 6662(b)(2) accuracy-related penalties to the extent that the taxpayers report errors resulting in additional tax or adequately discloses the tax treatment of an item that has a reasonable basis.

Notice 2022-60: This notice sets forth the corporate bond monthly yield curve, the corresponding spot segment rates and the 24-month average segment rates for November 2022. The notice also provides guidance as to interest rates on 30-year Treasury securities and 30-year Treasury weighted average rates.

Notice 2022-62: This notice contains the 2022 Required Retirement Plan Amendments List. The list establishes the end of the remedial amendment period and the plan amendment deadline for changes in qualification requirements and Section 403(b) requirements for qualified individually designed plans and Section 403(b) individually designed plans, respectively.

Proposed Regulations 112096-22: This document contains proposed regulations related to the foreign tax credit, which provide guidance with respect to the reattribution asset rule for purposes of allocating and apportioning foreign taxes, the cost recovery requirement and the attribution rule for withholding tax on royalty payments. Written comments should be received by January 23, 2023, for consideration.

Revenue Rule 2022-22: This revenue ruling provides the applicable federal rates for federal income tax purposes for December 2022. The short-term federal interest rate will increase to 4.55%, the mid-term rate will rise to 4.27% and the long-term rate will rise to 4.34%.

December 5, 2022: The IRS released Tax Tip 2022-185, promoting IRS social media accounts and e-News services. The IRS utilizes several social media platforms, including YouTube, Facebook, Instagram, Twitter and LinkedIn.

December 6, 2022: The IRS and the US Department of the Treasury (Treasury) issued proposed regulations that identify certain syndicated conservation easement (SCE) transactions as “listed transactions,” which means they must be reported to the IRS. The IRS previously identified certain SCE transactions in Notice 2017-10, however, courts have recently held that Notice 2017-10 is invalid because it did not follow notice and public comment procedures. The IRS also released Announcement 2022-28, which provides additional background information related to Notice 2017-10 and notes the IRS and the Treasury’s disagreement with the courts.

December 6, 2022: The IRS encouraged taxpayers to take important steps in December in preparation of filing their 2022 federal [...]

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Weekly IRS Roundup November 14 – November 18, 2022

by McDermott Will & Emery | Nov 21, 2022 | IRS Guidance, Tax Reform, Tax Refunds

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 14, 2022 – November 18, 2022.

November 14, 2022: The IRS released Internal Revenue Bulletin 2022-46, which highlights the following:

Announcement 2022-21: The Office of Professional Responsibility announced recent disciplinary sanctions involving lawyers, certified public accountants, enrolled agents, enrolled actuaries, enrolled retirement plan agents and appraisers.

November 14, 2022: The IRS released Notice 2022-59, which provides the adjusted applicable dollar amount to be multiplied by the average number of covered lives for purposes of calculating the fee imposed by Sections 4375 and 4376 for policy years and plan years that end on or after October 1, 2022, and before October 1, 2023. The amount is $3.00, up from $2.79.

November 14, 2022: The IRS released Tax Tip 2022-174, which provides an overview of the Taxpayer Bill of Rights (TBOR). We have previously posted about TBOR.

November 15, 2022: The IRS released Tax Tip 2022-175, reminding people that Giving Tuesday is coming up and is a good time to review whether their charitable donation is tax deductible. Giving Tuesday is the Tuesday after Thanksgiving.

November 15, 2022: The IRS reminded taxpayers that IRS Free File will be closed after November 17. IRS Free File allows people with incomes of $73,000 or less to file a return online for free using brand name software.

November 15, 2022: The IRS Advisory Council issued its 2022 Public Report, which includes recommendations for new and continuing issues in tax administration. The report emphasized the need for “consistent and multi-year funding for the IRS to achieve its goals of providing efficient, effective, modern service to the nation’s taxpayers.” The 146-page report details recommendations for 21 issues, including:

IRS business and information technology modernization
Reduction in electronic filing threshold for information return filers
Alignment of electronic signature requirements on withholding certificates
Accelerated issuance of IRS Form 6166, Certification of US Residency
Series 8038 Form Redesign and Updates
Business Master File Transcript Delivery Service

November 15, 2022: The IRS issued Revenue Rule 2022-22, which provides the applicable federal rates for federal income tax purposes for December 2022. The short-term federal interest rate will increase to 4.55%, the mid-term rate will rise to 4.27% and the long-term rate will rise to 4.34%.

November 16, 2022: The IRS released Revenue Procedure 2022-39, which obsoletes Revenue Procedure 94-69, 1994-2 C.B. 804, and sets out the procedures for eligible taxpayers to file an amended return in accordance with Section 1.6664-2(c)(4)(ii) of the regulations. This revenue procedure also sets out the procedures for eligible taxpayers to avoid the Sections 6662(b)(1) and 6662(b)(2) accuracy related penalties to the extent that the taxpayers report errors resulting in additional tax or adequately discloses the tax treatment of an [...]

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Update on Schedule UTP Comments

by Kevin Spencer and McDermott Will & Emery | Nov 14, 2022 | IRS Guidance, Tax Refunds

We previously discussed the Internal Revenue Service’s (IRS) announcement regarding draft changes to Schedule UTP, Uncertain Tax Position Return Statement, and Instructions to Schedule UTP (Form 1120). The IRS requested comments by November 18, 2022.

On November 14, 2022, we submitted our comments to the IRS outlining some of our concerns with the draft changes, focusing primarily on the scope of disclosure. We made the following recommendations:

Reconsider whether any changes should be made to Schedule UTP given the current rules in place regarding other disclosures (g., Forms 8275 and 8275-R) and the serious privilege concerns raised by the additional disclosure requirements.

Remove the requirement to disclose any positions that are “contrary” to any authorities or, at a minimum, to any Private Guidance.

If changes are made to Schedule UTP, work with taxpayers to determine the appropriate standard for determining whether there is “contrary” authority and what steps a taxpayer or return preparer must take before being able to satisfy the jurat requirement.

Issue published guidance clarifying that proper disclosure on Schedule UTP will satisfy the adequate disclosure requirement for purposes of both the disregard of rules and regulations and substantial understatement of tax grounds for imposing penalties under I.R.C. § 6662.