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Tax News Tidbits

On Behalf of | Sep 11, 2020 | Tax Law |

We hope that you are all continuing to stay safe and healthy out there and taking advantage of the many IRS and Maryland relief programs available.  We are resuming meetings via Zoom and look forward to seeing you there!  Our last meeting was informative and fun—with a discussion that included how taxes might be raised in the future.

Partnerships: In frequently asked questions (FAQs) posted on the IRS’ website, the IRS speaks to how partnerships should report ownership interests held by disregarded entities and gives examples for reporting some basis adjustments.

IRC Sec. 6428: 202 Recovery Rebates (IR 2020-93): IRS offered several explanatory scenarios to illustrate reasons taxpayers might receive economic impact payments at lower amount than anticipated.

Shorter Jail Time for COVID–Incarcerated taxpayer/pharmacist, serving time for failure to account for and pay over payroll taxes granted sentence reduction pursuant to 18 USCS 3582 due to novel coronavirus (COVID-19) and taxpayer’s particular health situation, which included heart condition and other issues. While his crimes were serious, such didn’t outweigh above, especially when considering non-violent nature of his offenses, that he had no criminal history, and that he paid all restitution ordered. (U.S. v. Harper, Jr., DC VA, 125 AFTR 2d ¶2020-694)

Proposed Regs & Estate/Non-Grantor Trust Deductions: certain deductions would not be miscellaneous itemized deductions and therefore not be affected by the suspension of the deductibility of miscellaneous itemized deductions for tax years beginning before 2026. The proposed regs also provide guidance on determining the character, amount, and allocation of deductions in excess of gross income succeeded to by a beneficiary on the termination of an estate or non-grantor trust. (Preamble to Prop Reg REG-113295-18; Prop Reg §1.67-4; Prop Reg §1.642(h)-2; Prop Reg §1.642(h)-5; IR 2020-90, May 7, 2020)

Non-Attorney Exams Postponed: The Tax Court, in a press release, has announced that the November 2020 non-attorney examination for admission to practice before the Court has been postponed until the fall of 2021.

Closing Agreements: Neither amendments to Code Sec. 162(f) by TCJA 17 (P.L. 115-97; 12/22/2017) nor execution of stated agreements prevents closing agreement between sub. and IRS, which became effective on stated date, from applying to settlement payments that sub. makes pursuant to specified agreement after 12/22/2017. (PLR 202019023)

IRC 368: Contribution, together with distribution, will qualify as Code Sec. 368(a)(1)(D) reorg., with distributing and controlled corps. each being “party to reorg.” under Code Sec. 368(b), and with no gain or loss recognized by either. (PLR 202019016)

IRC 446: Taxpayer was granted 45-day extension and issued to file copy of original Form 3115, changing its method of accounting under Rev Proc 2015-13, 2015-5 IRB 419 for stated taxable year, where taxpayer acted reasonably and in good faith and granting relief wouldn’t prejudice govt.’s interests. (PLR 202019006)

IRC 501: IRS issued final adverse determination that org. didn’t qualify for exempt status under Code Sec. 501(c)(3) where it failed to file protest to proposed adverse determination within requisite 30 days. (PLR 202019028)

Finally, please note that the IRS is starting to recall “certain employees in mission-critical functions to handle work that must be conducted onsite,” said the agency memo, sent Friday by IRS Human Capital Officer Robin D. Bailey Jr. and a deputy.  Further, IRS employees on telework should keep doing that “until all state and local stay-at-home orders are lifted and health and safety precautions have been met.”  See,