Federal Tax Update Podcast

This week we look at:

• Congress passes payroll tax credit for newly mandated paid sick leave

• Initial April 15 delay guidance only delayed payment date but no actual extension to file

• Late Friday guidance replaces first delay guidance with a real delay in April 15 filing date, though questions still remain

Copyright 2020, Kaplan, Inc.

Current Federal Tax Developments for the week of March 16, 2020: Waiting for Relief

• President declares emergency over COVID-19, directs Treasury to provide relief--and now we are waiting.
• HR 6201 passes the House and moves on to the Senate, containing a few tax provisions mainly related to mandatory sick leave provision rule
• AICPA letter issued to IRS regarding the informal §199A guidance the agency has issued
• HDHPs are allowed to pay for COVID-19 testing and treatment without jeopardizing ability of insured to make HSA contributions.
• Dropping a tax document in the mailbox turns out not to be a good idea, as USPS postmark was after the private postmark date on envelope.

Copyright 2020, Kaplan, Inc.

Current Federal Tax Developments for the week of March 9, 2020: Sometimes Too Late Really is Too Late:

• IRS denies a taxpayer's request to make a late mark to market election under §475(f)
• Loss limits for passive activities, basis and at-risk also limit self-employment loss use
• Revenue Procedure grants relief for filing some information returns for certain foreign trusts

Copyright 2020, Kaplan Financial Education

Current Federal Tax Developments for the week of March 2, 2020: Late Filing

• Taxpayer who voluntarily exited OVDI program ended up with very poor result.
• Illnesses of corporate officers not found to give reasonable cause for late filing of S corporation returns.
• Supreme Court refuses to review Ninth Circuit ruling upholding IRS regulation that only items listed in §7502 can be used to prove timely filing.

Copyright 2020, Kaplan, Inc.

Current Federal Tax Developments for the week of February 24, 2020: Meals and Entertainment After TCJA

• Proposed regulations can be relied upon in the interim, as well as continued reliance on Notice 2018-76
• Separate invoicing rule for food/beverage first released in Notice 2018-76 is also in the proposed regulations
• Definition of entertainment stays similar to older definition, but does not include business meals
• Adopts Notice 2018-76 rules for business meals
• Detailed guidance on meals related exceptions to 50% disallowance found at §274(e)

Copyright 2020, Kaplan, Inc.

Current Federal Tax Developments for the week of February 17, 2020: The Week of Fortnite and Schedule 1

• IRS urges tax professionals to make use of multi-factor authentication
• V-bucks and Roblox removed from list of convertible virtual currencies on FAQ
• Challenge to validity of regulations on disclosing basis in appraisal found wanting by the Tax Court

Copyright 2020, Kaplan, Inc.

This week we look at:

• Regulations implementing changes to FAVR and cents-per-mile methods finalized by IRS
• OIRA finishes review of final §163(j) regulations, starts review of additional proposed regulations
• Tax Court finds that language in deed fails to comply with regulations for qualified conservation easements
• Form 1023 now goes fully online--but only after 90 days when applicants can still use paper

Copyright 2020, Kaplan, Inc.

This week we look at:

• Special agent in charge of Los Angeles CID talks about their potential use of the virtual currency question on Schedule 1, Form 1040.

• Taxpayer wins on claim LLC was not a sham, but finds the result is actually worse when court rules amounts paid to law firm were start-up expenses under §195 TAM rules that taxpayer did not have an intangible related to synergistic benefits that could be written off.

• Taxpayer could not use claim of right provision under §1341(a) to claim a deduction related to gain recognized in prior year when trustee of grantor sold stock that trustee was barred from selling by the trust agreement.

• IRS and taxpayer agree that a regulation on the books since 2001 mandates a result different from what the court had arrived at when agreeing with IRS position on §7502(a) and late filed returns asserted originally in the case.

Copyright 2020, Kaplan, Inc.

Current Federal Tax Developments for the week of January 27, 2020: Real Soon Now

• IRS can use sample of transactions to carry burden for §165(c) kickbacks/bribery issues per CCA
• IRS gives IRA custodians relief on RMD notices for 2020--but it means IRA owners may get bad advice about required distributions
• Treasury indicates that guidance on excess distributions on termination deduction is “just around the corner.”
• Microsoft denied assertion of privilege for most documents prepared by outside accounting firm in transfer pricing case

Copyright 2020, Kaplan, Inc.

Current Federal Tax Developments for the week of January 20, 2020: Relief Week

• IRS expands rules excluding from income discharge of certain student loan debt
• Did the IRS just endorse a SALT workaround? Or maybe not…
• Small partnership late filing relief revenue procedure still in effect despite repeal of TEFRA provision
• Tax Court found taxpayer’s petition was more likely than not filed timely

Copyright 2020, Kaplan, Inc.