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Weekly IRS Roundup February 13 – February 17, 2023

by Sarah M. Raben | Feb 21, 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 February 13, 2023 – February 17, 2023.

February 13, 2023: The IRS released Internal Revenue Bulletin 2023-7, which highlights the following:

Revenue Procedure 2023-9: This procedure provides new rules and conditions for implementing the optional safe harbor method of accounting for real estate developers to determine when common improvement costs may be included in the basis of individual units of real property in a real property development project held for sale to determine the gain or loss from sales of those units (the Alternative Cost Method).

February 13, 2023: The IRS announced that interest rates will remain the same for the second quarter of 2023. As of April 1, 2023, the rates will be as follows:

Overpayments: 7%
Overpayments for corporations: 6%
Corporate overpayments for portion exceeding $10,000: 4.5%
Underpayments: 7%
Large corporate underpayments: 9%

Revenue Ruling 2023-4 contains the complete explanation of the calculations.

February 13, 2023: The IRS announced a new pilot phase for the Compliance Assurance Process (CAP) program called “Bridge Plus.” CAP is a cooperative pre-filing program for large corporate taxpayers. Taxpayers will be required to provide book-to-tax reconciliations, credit utilization and other supporting documentation shortly after their audited financial statement is finalized. An IRS team will then risk-assess the documents to determine if the taxpayer is suitable for the “Bridge Plus” phase.

February 13, 2023: The US Department of the Treasury (Treasury) and the IRS announced guidance to establish a program that would provide solar and wind power to certain low-income areas under the Inflation Reduction Act of 2022. Notice 2023-17 establishes the Low-Income Communities Bonus Credit Program and provides initial guidance for potential applicants for allocations of calendar year 2023 capacity limitation.

February 13, 2023: The IRS and the Treasury announced guidance on the Qualifying Advanced Energy Product Credit. Notice 2023-18 establishes the Section 48C(e) program to allocate $10 billion in credits ($4 billion of which may only be allocated to projects located in certain energy communities census tracts). The notice also provides initial program guidance. The goal of the program is to expand US manufacturing capacity and quality jobs for clean energy technologies (including production and recycling), reduce greenhouse gas emissions in the US industrial sector and secure domestic supply chains for critical materials (including specified critical minerals) that serve as inputs for clean energy technology production.

February 13, 2023: The IRS released Tax Tip 2023-18, reminding people that the Earned Income Tax Credit is a major tax benefit for millions of low- and moderate-income workers. Taxpayers can check their eligibility and how much they qualify for here.

February 14, 2023: The IRS released Tax Tip 2023-19, providing resources and suggestions for choosing [...]

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Weekly IRS Roundup October 11 – October 15, 2021

by McDermott Will & Emery | Oct 18, 2021 | IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 11, 2021 – October 15, 2021. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

October 12, 2021: The IRS released a notice, announcing that the US Department of the Treasury (Treasury) and the IRS intend to amend the regulations under Section 987 to defer the applicability date of certain final regulations by one additional year. The deferred regulations will apply to tax years beginning after December 7, 2022. For calendar year taxpayers, the 2016 final regulations and the related 2019 final regulations will apply to the tax year beginning on January 1, 2023. The IRS and Treasury do not intend to amend the applicability date of Treasury Regulation § 1.987-12.

October 13, 2021: The IRS published an updated Form W-8BEN-E (Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities)) and related instructions.

October 14, 2021: The IRS and Treasury published a notice and request for comments concerning assumption of partner liabilities. The rules relate to a partnership’s assumption of certain fixed and contingent obligations in connection with the issuance of a partnership interest, as well as to Section 358(h) for assumptions of liabilities by corporations from partners and partnerships and temporary regulations concerning the assumption of certain liabilities under Section 358(h). Written comments are due on or before December 13, 2021.

October 14, 2021: The IRS and Treasury published a notice and request for comments concerning Form 1127 (Application for Extension of Time for Payment of Tax Due to Undue Hardship). Written comments are due on or before December 13, 2021.

October 14, 2021: The IRS and Treasury published a notice and request for comments concerning Revenue Procedure 99-50, which permits combined information reporting by a successor business entity (i.e., a corporation, partnership or sole proprietorship) in certain situations following a merger or an acquisition. Written comments are due on or before December 13, 2021.

October 15, 2021: The IRS published draft instructions for Form 8949 (Sales and Other Dispositions of Capital Assets). The updated form reflects reporting for Section 1061, which concerns recharacterizing certain long-term capital gains of a partner who holds one or more applicable partnership interests as short-term capital gains.

October 15, 2021: The IRS published a news release, updating its process for certain frequently asked questions (FAQs) on newly-enacted tax legislation. The IRS is updating this process to address concerns regarding transparency and the potential impact on taxpayers when the FAQs are updated or revised. The IRS is also addressing concerns regarding the potential application of penalties to taxpayers who rely on FAQs by providing clarity as to their ability to rely on FAQs for penalty protection. The IRS stated that significant FAQs on newly-enacted [...]

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Weekly IRS Roundup November 30 – December 4, 2020

by McDermott Will & Emery | Dec 8, 2020 | IRS Guidance, Tax Reform

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 30, 2020 – December 4, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.

November 30, 2020: After releasing a pre-publication draft in early October, the IRS published TD 9926 in the Federal Register, which provides final regulations regarding withholding of tax and information reporting with respect to certain dispositions of interests in partnerships engaged in a trade or business within the United States under section 1446(f).

December 3, 2020: The IRS released Rev. Rul. 2020-28 related to the determination of the rate of interest under section 6621.

December 3, 2020: The IRS released Draft Instructions to Form 8992 related to the deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).

December 4, 2020: The IRS issued REG-111950-20 regarding passive foreign investment companies (PFICs) and the treatment of qualified improvement property under the alternative depreciation system.

December 4, 2020: The IRS issued TD 9936 regarding PFICs.

December 4, 2020: The IRS issued the Fall 2020 Statistics of Income Bulletin providing data about tax and information returns. The Bulletin highlights high-income tax returns for Tax Year 2017 and partnership returns for Tax Year 2018.

December 4, 2020: The IRS issued a Statement warning that employers will experience delays in receiving payments associated with Form 7200 Advance Payment of Employer Credits.

December 4, 2020: The IRS released Internal Revenue Bulletin 2020-50, dated December 7, 2020, containing the following highlights: Notice 2020-83 (Employee Plans); TD 9923 (Exempt Organizations); Rev. Proc. 2020-51 (Income Tax); Rev. Rul. 2020-26 (Income Tax); Rev. Rul. 2020-27 (Income Tax).

December 4, 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 Brian Moore in our Washington, DC, office for this week’s roundup.

Weekly IRS Roundup December 23 – 27, 2019

by McDermott Will & Emery | Dec 30, 2019 | IRS Audits, IRS Guidance, Tax Reform, Uncategorized

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 23 – 27, 2019.

December 20, 2019: The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a notice further extending the time for certain FBAR filings, citing the 2016 notice of proposed rulemaking that has not yet been finalized. Taxpayers whose filing due dates were previously extended by Notice 2018-1 will now have until April 15, 2021, to file. For all other taxpayers with an FBAR filing obligation, the filing due date remains April 15, 2020.

December 23, 2019: The IRS released proposed regulations that modify how to determine the source of income from sales of inventory produced within the United States and sold without the United States, or vice versa. The regulations also propose new rules regarding how to determine the source of income from sales of personal property (including inventory) by nonresidents, where the sales are attributable to an office or other fixed place of business that the nonresident maintains in the United States. The regulations also modify the rules that determine whether foreign source income is effectively connected with the conduct of a trade or business within the United States. The IRS has requested that written or electronic comments, as well as requests for a public hearing, be received by February 28, 2020.

December 27, 2019: The IRS released final regulations relating to withholding and reporting tax on certain US source income paid to foreign persons. The final regulations provide guidance on the due diligence and reporting rules applicable to persons making certain US source payments to foreign persons, as well as guidance on certain aspects of reporting by foreign financial institutions on US accounts. The final regulations are scheduled to be published in the Federal Register on January 2, 2020.

December 27, 2019: The IRS published an issue snapshot regarding the impact of the Tribal Social Security Fairness Act on tribal council members’ worker status. The issue snapshot addresses whether an Indian tribe’s decision—or lack thereof—to enter into a section 218A agreement and to elect social security coverage for its tribal council members will affect those workers’ classification for other purposes of the IRC, such as income tax and retirement plan participation.

December 27, 2019: The IRS published an issue snapshot explaining that under the TCJA, a corporation with a fiscal year that includes January 1, 2018, will pay federal income taxes using a blended tax rate, as opposed to a flat 21% tax rate. The IRS stated that fiscal year corporations may want to consider filing an amended return if they previously filed an income tax return that did not reflect the blended rate.

December 27, 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 Jenni Saperstein in our Chicago office for this week’s roundup.

Weekly IRS Roundup February 13 – February 17, 2023

Weekly IRS Roundup October 11 – October 15, 2021

Weekly IRS Roundup November 30 – December 4, 2020

Weekly IRS Roundup December 23 – 27, 2019

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