­

September 2020

STARTING A NEW BUSINESS? WHY A CPA MAY BE KEY TO YOUR SUCCESS

Getting your business off the ground is an exciting time for any entrepreneur. Your hard work, commitment, and planning have provided the ultimate payoff—you’re making money! But many business owners aren’t equipped to handle the onslaught of financial questions and big decisions that their businesses face early on; how should I set up my business? How do I file my […]

AICPA Urges IRS, Treasury to Issue Guidance on Payroll Tax Deferral

The American Institute of CPAs (AICPA) has urged the IRS and Treasury in an August 12 letter to issue guidance on President Trump’s payroll tax deferral memorandum. The executive action signed by the president on August 8 instructs Treasury to defer the collection and payment of payroll taxes from September 1 through years-end for eligible employees.

The presidential memorandum to defer […]

Final Regs Issued on Charitable Contributions and SALT Benefits

The IRS has released final regulations that address the interaction of the $10,000/$5,000 cap on the state and local tax (SALT) deduction and charitable contributions. The regulations include:

a safe harbor for individuals who have any portion of a charitable deduction disallowed due to the receipt of SALT benefits;
a safe harbor for business entities to deduct certain payments made […]

Final Regulations, Proposed Safe Harbor Issued for Section 163(j) Business Interest Limit

The IRS has issued final regulations regarding the limitation for the business interest expense deduction under Code Sec. 163(j), including recent legislative amendments made for the 2019 and 2020 tax years. Also, a safe harbor has been proposed allowing taxpayers managing or operating residential living facilities to qualify as a real property trade or business for purposes of the limitation. […]

IRS Issues Proposed Regulations on Partnership Carried Interests

The IRS has issued proposed regulations that implement the “carried interest” rules under Code Sec. 1061 adopted by Congress as part of the Tax Cuts and Jobs Act of 2017 ( P.L. 115-97). Some key aspects of the lengthy proposed regulations include the definition of important terms, how the rules work in the context of tiered passthrough structures, the definition […]

Temporary and Proposed Regulations Address Excess Employment Tax Credit Recapture Under Families First Act and CARES Act

The Treasury and the IRS have issued temporary and proposed regulations to:

reconcile advance payments of refundable employment tax credits provided under the Families First Coronavirus Response Act (Families First Act) ( P.L. 116-127) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136), and
recapture the benefit of the credits when necessary.

The text of the temporary […]

Guidance on CARES Act Defined Benefit Plan Funding Relief

The IRS has provided guidance on the special rules relating to funding of single-employer defined benefit pension plans, and related benefit limitations, under Act Sec. 3608 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136). The guidance clarifies application of the extended contribution deadline, and the optional use of the prior year’s adjusted funding target attainment […]

Proposed Regs Address Books and Witnesses Examinations by Non-Government Persons

The IRS has released proposed regulations that implement new Code Sec. 7602(f), which bars non-government persons who are hired by the IRS from questioning a witness under oath whose testimony was obtained pursuant to a summons issued under Code Sec. 7602. The regulations prohibit any IRS contractors from asking a summoned person’s representative to clarify an objection or assertion of […]

Proposed Regulations Address Small Business Simplified Accounting Rules

Proposed regulations adopt the post-2017 simplified accounting rules for small businesses.

Implementation

The Tax Cuts and Jobs Act ( P.L. 115-97) put in place a single $25 million gross receipts test (adjusted annually for inflation after 2018) for determining whether certain taxpayers can use the cash method of accounting, are not required to use inventories, are not required to apply the uniform […]

Eligible Rollover Distribution Safe Harbor Explanations Modified

The IRS has modified two safe harbor explanations in Notice 2018-74, 2018-40 I.R.B. 529, that can be used to satisfy the requirement under Code Sec. 402(f) that certain information be provided to recipients of eligible rollover distributions. The modifications were necessary due to recent changes in law made by the Setting Every Community Up for Retirement Enhancement Act of 2019 […]

CARES Act Provides Favorable Tax Treatment for Withdrawals from Retirement Plans, IRAs

The IRS has reminded taxpayers that the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136) can provide favorable tax treatment for withdrawals from retirement plans and Individual Retirement Accounts (IRAs). Under the CARES Act, individuals eligible for coronavirus-related relief may be able to withdraw up to $100,000 from IRAs or workplace retirement plans before December 31, 2020, […]

Final and Proposed Regulations Issued on GILTI High-Tax Exclusion

The Treasury and IRS have issued final and proposed regulations under the global intangible low-taxed income (GILTI) and subpart F provisions for the treatment of high-taxed income. The final regulations provide guidance on determining the type of high-taxed income that is eligible for the exclusion (the “GILTI high-tax exclusion” or GILTI HTE).

Proposed regulations generally conform the rules for the subpart […]

August 2020

Trump Signs PPP Application Extension Bill

On July 4, President Donald Trump signed into law a Paycheck Protection Program (PPP) application extension bill that Congress had quickly passed just before the Independence Day holiday. According to several senators, the measure was “surprisingly” introduced and approved by unanimous consent in the Senate late on June 30. It cleared the House the evening of July 1.

Most notably, the bill pushes […]

Guidance on Reporting COVID-19 Qualified Sick and Family Leave Wages

The IRS has issued guidance to employers on the requirement to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (Families First Act) ( P.L. 116-127). This reporting provides employees who are also self-employed with information necessary for properly claiming qualified sick leave equivalent or qualified family leave equivalent credits […]

Guidance and Relief for 2020 RMD Waiver, Required Beginning Date Changes

The IRS has issued guidance and temporary relief for required minimum distribution (RMD) changes in 2020. Distributions that would have been RMDs under old law are treated as eligible rollover distributions. The 60-day rollover period deadline for any 2020 RMDs already taken has been extended to August 31, 2020. Notice 2007-7, I.R.B. 2007-5, 395 is modified.

SECURE and CARES Acts
The new guidance […]

Mid-Year Safe Harbor Plan Amendments and COVID-19 Relief

The IRS has clarified and provided relief for mid-year amendments reducing safe harbor contributions. An updated safe harbor notice and an election opportunity must be provided even if the change is only for highly compensated employees. Coronavirus (COVID-19) relief applies if a plan amendment is adopted between March 13, 2020, and August 31, 2020. For nonelective contribution plans, the supplemental […]

IRS Amends 199A Regs on Suspended Losses and RICs

The IRS amended final regulations with guidance on the Code Sec. 199A deduction for suspended losses and shareholders of regulated investment companies (RICs). The amendments address the treatment of suspended losses included in qualified business income (QBI), the deduction allowed to a shareholder in a regulated investment company (RIC), and additional rules related to trusts and estates. The IRS had previously issued […]

Final Regulations Issued on FDII and GILTI Deduction

The Treasury and IRS have issued final regulations covering the Code Sec. 250 deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). Proposed regulations were issued on March 6, 2019 (NPRM REG-104464-18). The final regulations maintain the basic approach and structure of the proposed regulations and provide guidance on computation of the deduction and the determination of FDII, including […]

July 2020

Trump Signs Paycheck Protection Program Flexibility Act Into Law

President Donald Trump signed into law the bipartisan Paycheck Protection Program Flexibility Act of 2020 (P.L. 116-142) on June 5. The legislation aims to expand usability of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s ( P.L. 116-136) headliner small business loan program.

PPP in the House
The bipartisan, bicameral-crafted P.L. 116-142 makes several changes to the rapidly implemented Paycheck Protection Program (PPP) administered […]

Treasury, SBA Issue Updated PPP Guidance, Revised Application and Forgiveness Forms, New EZ Forgiveness Form

In consultation with Treasury Department, the Small Business Administration (SBA) has issued:

new and revised guidance for the Paycheck Protection Program (PPP);
revised PPP application forms;
a revised PPP loan forgiveness application; and
a new “EZ” PPP loan forgiveness application.

New, Revised PPP Guidance
The guidance implements the Paycheck Protection Program Flexibility Act (PPPFA) ( P.L. 116-142), which President Trump signed on June 5, 2020. […]

IRS Postpones More Deadlines Due to COVID-19 Emergency

The IRS is postponing deadlines for certain time-sensitive actions due to the Coronavirus Disease 2019 (COVID-19) emergency. This relief affects employment taxes, employee benefit plans, exempt organizations, individual retirement arrangements (IRAs), Coverdell education savings accounts, health savings accounts (HSAs), and Archer and Medicare Advantage medical saving accounts (MSAs).

With certain exceptions, the relief postpones deadlines for certain actions due to be […]

Coronavirus-Related Distributions and Plan Loan Guidance

The IRS has issued guidance on coronavirus-related distributions and plan loans. The guidance

presents the rules set out in Act Sec. 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act ( P.L. 116-136);
adds three new categories to the list of individuals who qualify due to adverse financial consequences;
provides analysis and examples of repayments reporting; and
includes safe […]

IRS Temporarily Allows Certain Retirement Plan Participants to Sign Elections Remotely

The IRS has released guidance that provides temporary administrative relief to help certain retirement plan participants or beneficiaries who need to make participant elections by allowing flexibility for remote signatures. Specifically, the guidance provides participants, beneficiaries, and administrators of qualified retirement plans and other tax-favored retirement arrangements with temporary relief from the physical presence requirement for any participant election (1) […]

IRS Provides COVID-19 Related Safe Harbors for Determining Tax Status of Arrangements that Hold Real Property as Trusts

The IRS has released a revenue procedure that describes temporary safe harbors for the purpose of determining the federal tax status of certain arrangements that hold real property as trusts in response to the COVID-19 emergency. Specifically, the Service has provided temporary relief to arrangements that are treated as trusts under Reg. §301.7701-4(c) which are, or have tenants who are, experiencing financial […]

Deadlines Extended for Qualified Opportunity Funds and Investors

The IRS has announced various extensions of deadlines for qualified opportunity funds and their investors due to the Coronavirus pandemic.

180-Day Investment Period
Generally taxpayers must reinvestment capital gain in a qualified opportunity fund (QOF) within 180 days after the gain is realized from a sale or exchange. Under the guidance, if the last day of the 180-day investment period falls on […]

Load More Posts