Weekly Report from Washington, D.C.

While Congress continued its August recess, the IRS issued guidance in a number of areas. The Service also acknowledged that the breach of one of its popular online apps exposed more taxpayers to the risk of identity theft than originally believed.

IRS Data Breach. The IRS reported that the May 2015 breach of its Get Transcript app was larger than originally believed (TAXDAY, 2015/08/18, I.1). According to the IRS, as many as 220,000 more taxpayers may have had their account information downloaded by criminals.

AFRs. Various prescribed rates for federal income tax purposes for September 2015 have been provided by the IRS (Rev. Rul. 2015-19; TAXDAY, 2015/08/20, I.2). The annual short-term, mid-term and long-term applicable federal interest rates (AFRs) are 0.54 percent, 1.77 percent and 2.64 percent, respectively.

Tax Preparers. The IRS has reminded tax professionals to review their e-file application information through e-services (TAXDAY, 2015/08/21, I.1). The IRS requires e-file application information to be updated within 30 days of any changes, such as individuals involved, addresses or telephone numbers and failure to do so may result in EFIN deactivation.

Tax Deposits. The IRS has provided additional information on the early contact program for payroll tax problems that was previously announced (IRS Collection Launches Early Interaction Initiative; TAXDAY, 2015/08/21, I.2). According to the IRS, the Early Interaction Initiative will accelerate and enhance the current Federal Tax Deposit Alerts program under which collection field staff are assigned to cases when the IRS’s records indicated that an employer’s payroll tax deposits have declined.

PPACA Reporting. The IRS has released draft instructions for electronically filing some information returns required by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) (TAXDAY, 2015/08/21, I.6). The draft instructions detail communication procedures, transmission formats and validation procedures.

Returns. The IRS had reminded owners of heavy highway vehicles that the federal highway use tax return is due on August 31, 2015 (IR-2015-101; TAXDAY, 2015/08/19, I.3). The August 31 due date generally applies to Form 2290 and the accompanying tax payment for the tax year that begins on July 1, 2015, and ends on June 30, 2016.

Fuel Credits. The IRS has issued guidance about the federal income tax treatment of credits under Code Sec. 6426(c) and Code Sec. 6426(d) that are paid in cash under the one-time claim submission process of section 160(e) of the Tax Increase Prevention Act of 2014 (P.L. 113-295) (Notice 2015-56; TAXDAY, 2015/08/17, I.1). The guidance amplifies Notice 2015-3 , I.R.B. 2015-6, 583.

Farm Valuation. A listing of the average annual effective interest rates on new loans under the Farm Credit System has been issued by the IRS (Rev. Rul. 2015-18; TAXDAY, 2015/08/21, I.4). The rates are used in computing the special use value of farm real property for which an election is made under Code Sec. 2032A .

Reg Hearing. The IRS has scheduled a public hearing on a proposed regulation addressing when a foreign insurance company’s income is excluded from the definition of passive income for the passive foreign investment company rules (NPRM REG-108214-15, I.R.B. 2015-23, 1035) (TAXDAY, 2015/08/19, I.1). The hearing is scheduled for Friday, September 18, 2015.

Disaster Relief. The Federal Emergency Management Agency (FEMA) has announced that President Obama determined that certain areas are eligible for disaster assistance from the federal government (TAXDAY, 2015/08/19, I.5). The areas are located in the Commonwealth of the Northern Mariana Islands, West Virginia, the Oglala Sioux Tribe and Texas.

By Brant Goldwyn, Wolters Kluwer News Staff



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