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Weekly IRS Roundup August 10 – August 14, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of August 10, 2020 – August 14, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

August 10, 2020: The IRS published corrections to a notice of proposed rulemaking related to section 245A(e) (Hybrid Dividends) that was published in the Federal Register on April 8, 2020. The notice contained proposed regulations that adjust hybrid deduction accounts to take into account earnings and profits of a controlled foreign corporation that are included in income by a US shareholder. The corrections are effective on August 11, 2020.

August 10, 2020: The IRS published corrections to final regulations from 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 correction is effective on August 12, 2020.

August 12, 2020: The IRS published a memorandum that modifies Taxpayer Advocate Service (TAS) case acceptance criteria for cases involving Economic Impact Payments (EIPs).

August 12, 2020: The IRS announced changes to user fees relating to certain requests for letter rulings and determinations that will take effect on January 4, 2021. The increased user fees described in this announcement will be reflected in Rev. Proc. 2021-4, which will be published in Internal Revenue Bulletin 2021-1 on January 4, 2021.

August 13, 2020: The IRS published a practice unit concerning the identification, review of the computation and determination of the circumstances when section 986(c) recognition is appropriate in the pre-Tax Cuts and Jobs Act (TCJA) environment. The practice unit addresses two issues: (1) Did the taxpayer correctly compute section 986(c) exchange gain or loss on the distribution of previously taxed earnings and profits (PTEP) to its US parent?; and (2) Was the distribution of previously taxed earnings and profits to the US parent resulting in the section 986(c) exchange gain or loss part of a step transaction that should be collapsed, a transaction lacking a business purpose and/or a transaction that lacks economic substance?

August 14, 2020: The IRS released Internal Revenue Bulletin 2020-34, dated August 17, 2020, containing the following: (1) REG-111879-20 (Employment Tax); (2) TD 9904 (Employment Tax); (3) REG-112042-19 (Excise Tax); (4) Notice 2020-58 (Income Tax); and (5) REG-132766-18 (Income Tax).

August 14, 2020: The IRS published corrections to final regulations (TD 9885) that were published in the Federal Register on Friday, December 6, 2019. The final regulations implement the base erosion and anti-abuse tax, which is designed to prevent the reduction of tax liability by certain large corporate taxpayers through certain payments [...]

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Weekly IRS Roundup December 17 – 21, 2018

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 17 – 21, 2018:

December 18, 2018: The IRS issued a news release providing guidance on excess business loss limitations and net operating losses following changes made by the Tax Cuts and Jobs Act.

December 19, 2018: The IRS issued Revenue Ruling 2019-03, providing various prescribed rates for federal income tax purposes for January 2019.

December 19, 2018: The IRS issued Revenue Procedure 2019-06, prescribing discount factors used in computing unpaid losses under section 846 of the Code, as amended by the Tax Cuts and Jobs Act.

December 19, 2018: The IRS issued Notice 2019-04, extending temporary dyed fuel relief, initially provided in Notice 2017-30, through December 31, 2019.

December 20, 2018: The IRS issued proposed regulations implementing anti-hybrid provisions under sections 245A(e) and 267A of the Code, enacted as part of the Tax Cuts and Jobs Act.

December 20, 2018: The IRS issued proposed regulations dealing with the treatment of the sale of US trade or business partnership interests by foreign partners under section 864(c)(8) of the Code, enacted as part of the Tax Cuts and Jobs Act.

December 20, 2018: The IRS issued Revenue Procedure 2019-09, updating guidance on when a taxpayer has provided adequate disclosure of tax positions for the purpose of avoiding penalties.

December 20, 2018: The IRS issued Notice 2019-06, informing taxpayers of its intent to issue proposed regulations addressing special enforcement matters under section 6241(11) of the Code, with regard to the centralized partnership audit regime.

December 21, 2018: The IRS issued final regulations implementing the centralized partnership audit regime under sections 6221 through 6241 of the Code.

December 21, 2018: The IRS issued Revenue Procedure 2019-08, providing guidance on deducting expenses under section 179(a) of the Code and deducting depreciation under section 168(g), as amended by the Tax Cuts and Jobs Act.

December 21, 2018: The IRS issued Notice 2019-05, expanding the list of hardship exemptions from the individual shared responsibility payment under section 5000A of the Code.

December 21, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to Le Chen in our DC office for this week’s roundup.