Federal Tax Update Podcast

This week we look at:

• Congress passes spending bill which included SECURE 2.0 Act of 2022
• Final Schedules K-2 and K-3 instructions issued for Form 1120S
• IRS delays digital asset reporting until regulations are issued
• Expanded Form 1099-K reporting delayed for one year by the IRS

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This week we look at:

IRS memorandum looks at marketed program to defer recognition of legal fees

Automatic change of accounting method procedure released by the IRS

IRS publishes news release on upcoming FICA/SE tax 2020 deferral payment due date

This week we look at:

• IRS releases second draft of instructions for preparing 2022 Schedules K-2 and K-3 for partnerships and S corporations
• IRS begins issuing proposed regulations to deal with court losses on method used to add listed transactions not following the Administrative Procedures Act

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This week we look at:

• IRA 2022 prevailing wage and apprenticeship requirement guidance issued by the IRS
• Taxpayers denied partnership loss due to a large number of issues, many of which were enough standing alone to deny the loss entirely 

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This week we look at:

• Damage award found to not be for physical injuries, entire amount taxable
• Partnership language in LLC operating agreement revision terminated S corporation status (creating a C corporation)
• Taxpayer failed to wait required 6 months for IRS to act on refund claim before filing suit

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This week we look at:

• IRS news releases this week on:
  • Qualified charitable distributions
  • Seventh Annual National Tax Security Awareness Week

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This week we look at:

• Tax Court finds that adding to listed transactions requires IRS to comply with Administrative Procedures Act
• Election results and likely tax actions in lame duck session
• What about next year with the new Congress?

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This week we look at:

• IRS releases Form 1120-S Schedule K-2 and K-3 draft instructions with similar exceptions to Form 1065 version
• IRS gives some indication on when §174 guidance will come out
• Tax benefits alone not enough to establish taxpayer had a profit motive in solar lens leasing business
• IRS grants late rollover relief to victim of fraud

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This week we look at:

• It’s PTIN renewal time again and the IRS has released a news release announcing the fact
• IRS publishes draft 2022 Form 1065 Schedules K-2 and K-3 instructions with revised exceptions to filing Schedules K-2 and K-3

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This week we look at:

• IRS announces and appears to roll out pilot program to block automated calling systems
• 2023 inflation adjusted general tax amounts released by the IRS
• Retirement/IRA limitations released for 2023

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This week we look at

• AICPA writes the IRS again on issues with PTET taxes
• SECURE Act Proposed Regulations RMD rules for inherited accounts in pay status effective date delayed
• IRS releases S corporation relief guidance
• AICPA Tax Section fact sheet on the employee retention credit

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This week we look at:

• FinCEN releases final regulations that will require beneficial owner reporting for small LLCs and corporations
• IRS updates FAQ for state and local fiscal recovery funds used for home purchases
• Hurricane Ian relief announced by Treasury, delays most filings to February 15, 2022

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This week we look at:

• IRS issues reminder on penalty relief deadline that makes some modifications
• IRS publishes another news release pushing the CCA on improper PPP loan forgiveness

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This week we look at:

• IRS memorandum states that PPP loan forgiveness is taxable if taxpayer did not actually qualify for forgiveness granted
• AICPA adds to items requested for additional penalty relief under Notice 2022-36

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This week we look at:

• Chair and Ranking Member of the Senate Finance Committee send Enhancing American Retirement Now (EARN) Act to the Senate floor
• IRS inadvertently makes Form 990-T data on non-§501(c)(3) organizations available for bulk download
• Reasonable cause for failure to file/pay does not include common financial challenges

This week we look at:

• Trust terms mean estate gets no deduction for marital or charitable contribution for specified payment value
• IRS provides for broad penalty relief for certain returns from 2019 to 2020
• National Taxpayer Advocate publishes blog post explaining IRS penalty relief

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This week we look at

• Inflation Reduction Act of 2022 signed into law on August 16, 2022
• Information on electric vehicle for 2022 released by Treasury, IRS and Department of Energy
• Outline electric vehicle credit for remainder of 2022 and 2023 changes
• IRS releases sample Written Information Security Plan (WISP) for tax professionals

The House and Senate pass the Inflation Adjustment Act of 2022 and we look at some key provisions:

• Increase in funding at the IRS
• Continuation of 2021-2022 Premium Tax Credit Rules
• Tax credits on clean energy vehicles
• Expansion & extension of residential energy credits
• Credit transfer provisions

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This week we look at:

• IRA 2022 passes the Senate with revisions, House to take it up this week and may vote on Friday
• Inflation adjusted premium tax credit percentages released
• IRS revises questions on digital assets on Form 1040 for 2022
• $51 million payment was not deductible alimony
• IRS finalizes removal of signature requirement on §754 election

This week we look at:

• Proposed Inflation Reduction Act of 2022 - will it pass and what’s in it?
• Taxpayer told by court suit is being dismissed, must file 2020 income tax return to obtain economic impact payment not previously sent to taxpayer
• IRS Security Summit warns tax pros about significant security threats to taxpayer data in their systems

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This week we look at:

• IRS wants preparers to advise clients to opt-in to IP-PIN program.
• TAM holds that an activity that is treated as a material participation activity for five straight years under SPA test will be a material participation activity under the 5/10 test in year 6
• Breadwinner not granted innocent spouse relief when she failed to inquire about or review return prepared by accountant spouse

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This week we look at:

• Reconciliation bill talks stall in Congress
• Taxpayer loses on charitable contribution deduction due to failure to give entire interest and lacking proper acknowledgment for donation to donor advised fund
• Taxpayer not allowed to shorten statute for collections based on shortcomings in own OIC filings
• No reasonable cause for failure to report distribution when 1099-R sent to wrong address

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This week we look at:

• Discussions start up again for reconciliation bill.
• IRS extends automatic late portability election relief to five years
• Federal tax lien attached to payments being made to seller’s former spouse for alimony by business buyer
• No reasonable cause for late payment and late filing

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This week we look at:

• Taxpayer Advocate Service begins accepting referrals on 2021 and earlier original & amended returns from Congressional offices
• Car dealer had more than “some” guarantee of right to retain cash deposits
• Fifth Circuit rules that substantial compliance on charitable donations cannot be sufficient for failure to follow the statute, as opposed to regulations

This week we look at:

• Senate Finance Committee takes action on retirement bill
• IRS and National Taxpayer Advocate release information on processing paper tax returns
• Supreme Court to take on case involving computing FBAR penalties
• IRS adds voice bot support for some ACS issues

This week we look at:

• Foreclosure proceeds could have paid interest on second mortgage, but taxpayer unable to show it was so applied

• Nurse allowed deduction for comfortable and professional clothing

• Innocent spouse relief not available for trust fund penalty liability

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This week we look at:

• IRS increases mileage rates effective July 1, 2022
• Taxpayer unsuccessfully asks for relief for failing to file Form 3115

• AICPA letter on Section 174 guidance from the IRS - TCJA changes
• Form 7203 - impact on tax season and dealing with lack of basis records

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• Taxpayer discovers her documentation for a charitable contributions did not meet the IRC requirements
• IRS rules an enterprise involved in retail drug sales is a qualified trade or business under IRC §1202

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This week we look at:

• Physician’s payments are found not to be deductible alimony under pre-TCJA divorce agreement
• IRS announces option for employer leave-based donation programs related to aid for Ukraine
• IRS extends, likely for the final time. option to remotely sign certain plan documents

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This week we look at:

• Special rules under IRC §104 for military disability and retirement income
• Expenses claimed as management fees treated as distributions to owners
• Proposed regulations to limit use of certain techniques for use of anti-clawback rules
• It’s going to be a longer than expected wait to file K-2/K-3 for S corporations via MeF

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• Tax rules for no-additional cost services
• SCOTUS refuses to hear challenge to SALT cap
• IRS finally grants election/accounting method relief for retroactive 2019 changes
• Rules for a real estate professional
• IRS expands on Schedules K-2 and K-3 FAQs on April 11

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• IRS Suspends Mailing More Notices - This Time Related to Exempt Organizations
• Tax Court Affirms IRS Denial of Interest Abatement
• Securing a Strong Retirement Act Passes House Overwhelmingly
• Above the Line Classroom Teacher’s Deductions Increases to $300 in 2022

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This week we look at:

• IRS releases revised depreciation limits for 2022 for autos under IRC §280F
• Lawmakers send yet another letter to the IRS regarding stopping the sending of notices
• Farmer/fisherman estimated tax payment relief formalized in an IRS Notice

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This week we look at:

• Department of Labor warns §401(k) plan administrators regarding offer digital asset investment options
• No deduction allowed to corporation for paying tuition for training program for boyfriend of 100% shareholders’ daughter
• IRS announces program to deal with the backlog of returns and correspondence

This week we look at:

• IRS looks to increase EA user fees by over 100%
• Justice Department files motion to have staking case dismissed as moot
• IRS to grant relief to certain farmers and fisherman impacted by inability of some tax software to file Form 7203 by March 1

This week we look at:

• Proposed regulations on required minimum distributions
• AICPA and state societies letter on delay for K-2 and K-3 filings
• Data entry error did not provide reasonable cause for tax understatement

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This week we look at the IRS's newly issued 2021 Schedule K-2 and K-3 filing relief. How much does the option added in Question 15 of the newly released FAQ on K-2 and K-3 issues really help partnerships and S corporations? Who does and doesn't qualify for this relief? And what about 2022 and future years?

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This week we look at:

• IRS adds more information on research credit claims issues
• LB&I announces new partner basis campaign
• IRS expands list of notices being temporarily suspended
• K-2 and K-3 filing issues being addressed by vendors, IRS defends process

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This week we look at:

• Continuing saga of the K-2 and K-3 filing issues, including an extreme delay in accepting them electronically.
• Consider interim filing method to electronically file these returns
• OPR Director announces that IRS plans to add features to TaxPro site by mid-summer, additional features added for following year.
• OPR Director also notes that Treasury has finished reviewing the revisions to Circular 230

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• This week we look at: IRS revises instructions for Schedule K-2 and K-3 and points taxpayers to fact more may need to file this than might have thought they would
• IRS stops issuing one (and just one) automated notice, complains about issues blocking doing more
• AICPA issues statement critical of IRS statement on giving relief, wants all Tax Professionals United for Taxpayer Relief Coalition recommendations adopted

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This week we look at

• IRS issues updated substantially equal payment guidance
• Final version of basis reporting form for S corporation shareholders issued by IRS
• IRS clarifies how to report expenses used to obtain PPP forgiveness on Schedule M-2
• IRS completes guidance on reporting options for timing of PPP loan forgiveness income recognition

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This week we look at:

• Form 1024 joins Form 1023 in becoming online only filings
• Pressure builds on the IRS to pause automated notices in light of inability to handle correspondence on notices already issued
• IRS announces beginning of filing season along with other information for the season

Get updates as they are written up on our website at http://www.currentfederaltaxdevelopments.com

Copyright 2022, Kaplan, Inc.

This week we look at:

• IRS publishes detail on changes for amended returns and research credits
• Taxpayers do not have to pay in tax IRS undercomputed when adjusting for unemployment compensation
• Expenses used for PPP loan forgiveness do not reduce AAA for S corporations per IRS instructions
• Information letter addresses when industry accountant becomes a paid preparer

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This week we look at:

• IRS quietly revises Ida relief revision
• Reagan-era regulations on conservation easements found to be invalid by Eleventh Circuit
• IRS objects to attempt to use 7 month old valuation for GRAT
• Taxpayer fails at attempt to use a deposit in collection case
• Deadline arrives for taxpayers who deferred FICA/SECA to make first of two installment payments

Copyright 2022, Kaplan Financial Education