CCH Tax Day Report
Congress remains on recess with lawmakers scheduled to return to Washington after Labor Day. The IRS announced a self-certification procedure that is designed to help taxpayers who inadvertently miss the 60-day mark for rolling over retirement plan distributions into other plans or individual retirement arrangements. In addition, the IRS has launched a new webpage to provide resources to taxpayers who are part of the “sharing economy.”
House. House Majority Leader Kevin McCarthy, R-Calif., has announced that the House will soon vote on legislation that would exempt the value of Olympic and Paralympic medals and monetary awards from an athlete’s taxable income (TAXDAY, 2016/08/25, C.1 ). “The House will consider this bill soon after its passage out of the Ways and Means Committee,” McCarthy said in a statement.
House Ways and Means Committee Republicans and Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, wrote to Treasury Secretary Jack Lew separately expressing concern and requesting changes to proposed Code Sec. 385 debt-equity regulations (NPRM REG-108060-15, I.R.B. 2016-17, 636) (TAXDAY, 2016/08/23, C.1 ). A group of Senate Finance Committee Republicans also wrote to Lew expressing concerns regarding the proposed regulations (TAXDAY, 2016/08/26, C.1 ).
FinCEN. The Financial Crimes Enforcement Network (FinCEN) has issued proposed regulations that remove the anti-money laundering program exemption for banks that lack a federal functional regulator (RIN 1506-AB28; TAXDAY, 2016/08/25, T.1 ).
Rollovers. The IRS has provided a self-certification procedure designed to help recipients of retirement plan distributions who inadvertently miss the 60-day time limit for properly rolling these amounts into another retirement plan or individual retirement arrangement (IRA) (IR-2016-113, Rev. Proc. 2016-47; TAXDAY, 2016/08/25, I.2 ). Following this new guidance, eligible taxpayers who missed the time limit will generally qualify for a waiver if one or more of 11 circumstances, listed in the revenue procedure, apply to them.
Sharing Economy. The IRS has launched a new website designed to help taxpayers who are part of the sharing economy community quickly locate the resources they need to help them meet their tax obligations (IR-2016-110; TAXDAY, 2016/08/23, I.2 ). The site offers tips and resources on a number of topics, from filing requirements and making quarterly estimated tax payments to self-employment taxes and special rules for reporting vacation home rentals.
Management Contracts. The IRS has released guidance that provides a safe harbor under which a management contract will not result in either the private business use of property financed by governmental tax-exempt bonds or cause the modified private business use test for property financed by qualified Code Sec. 501(c)(3) bonds to be met (Rev. Proc. 2014-44; TAXDAY, 2016/08/23, I.1 ). The safe harbor lists six conditions that must be met to ensure that a management contract does not result in private business use under Code Secs. 141(b) or 145(a)(2)(B ).
Rulings. The IRS issued guidance setting forth areas on which the Service will not issue letter rulings or determination letters (Rev. Proc. 2016-45; TAXDAY, 2016/08/29, I.1 ). The IRS removed two no-rule areas relating to distributions of stock of controlled corporations under Code Sec. 355.
Extenders. The IRS provided guidance for taxpayers for making certain elections and filing amended returns to avail themselves of extenders from the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) (P.L. 114-113 ) (Rev. Proc. 2016-48; TAXDAY, 2016/08/29, I.2 ).
Compensation. The IRS determined that a service provider could not take into account over a four-year adjustment period a Code Sec. 481(a) adjustment related to vested deferred compensation attributable to services performed before January 1, 2009 (AM 2016-003; TAXDAY, 2016/08/23, I.4 ). The adjustment would have resulted in some of the vested deferred compensation being included in income after 2018.
Taxpayer Advocate. National Taxpayer Advocate Nina E. Olson released Volume Two of her midyear report to Congress that contains the IRS’s responses to her administrative recommendations from her 2015 Annual Report ( IR-2016-112; TAXDAY, 2016/08/25, I.1 ). The report also contains an analysis by the Taxpayer Advocate Service (TAS) of the IRS’s responses and TAS’s disagreement with the IRS’s position.
Advisory Committee. The IRS is currently accepting applications to serve on the Advisory Committee on Tax Exempt and Government Entities (ACT), which provides advice and public input on the various areas of tax administration served by the Tax Exempt and Government Entities Division (TE/GE) (IR-2016-114; TAXDAY, 2016/08/25, I.1 ).
Scheduled Maintenance. The IRS has informed tax professionals of the upcoming maintenance to the ACA Information Return (AIR) System and the annual Labor Day weekend power outage for the Modernized e-File (MeF) systems (TAXDAY, 2016/08/25, I.3 ). The AIR System maintenance will begin at 8:00 a.m. ET on August 27 through 7:59 a.m. ET on August 28, while the Labor Day power outage will begin on Saturday, September 3, at 8:00 p.m. ET and end on Tuesday, September 6 at 6:00 a.m. ET.
By Jessica Jeane, Jalisa Mathis and George L. Yaksick, Jr., Wolters Kluwer News Staff