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Archive for February 12th, 2021

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Information Reporting Waived for Nontaxable COVID Assistance

Information Reporting Waived for Nontaxable COVID Assistance The IRS has waived the requirement to file Form 1099 series information returns or furnish payee statements for certain COVID-related relief that is excluded from gross income. Reporting Affected The IRS waives the requirement to file Form 1099 series information returns, or furnish payee statements, for the following: […]

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Relief for Automobile Lease Valuation Rule Users

Relief for Automobile Lease Valuation Rule Users Due to the COVID-19 pandemic, certain employers and employees who use the automobile lease valuation rule to determine the value of an employee’s personal use of an employer-provided automobile may switch to the vehicle cents-per-mile method. Background Under the general rule, an employer who provides an employee a […]

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Relief for Certain Excess Business Loss-Related Underpayments

Relief for Certain Excess Business Loss-Related Underpayments Estimated tax underpayment penalties under Code Sec. 6654 are waived for certain excess business loss-related payments for tax years beginning in 2019. The relief is available to individuals, as well as trusts and estates that are treated as individuals for estimated tax payment penalty purposes. Rules Delayed Certain […]

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Period for Paying Deferred Employee Payroll Tax Extended

Period for Paying Deferred Employee Payroll Tax Extended The IRS has extended the time period during which employers must withhold and pay the employee portion of Social Security tax that employers elected to defer on wages paid from September 1, 2020, through December 31, 2020. Specifically: the end date of the period for withholding and […]

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Reporting Penalty Relief for Partnerships

Reporting Penalty Relief for Partnerships The IRS has issued guidance that provides partnerships with relief from certain penalties for the inclusion of incorrect information in reporting their partners’ beginning capital account balances on the 2020 Schedules K-1 (Forms 1065 and 8865). The IRS has also provided relief from accuracy-related penalties for any tax year for […]

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Final Regs Address the Deduction Limit for Compensation in Excess of $1,000,000

Final Regs Address the Deduction Limit for Compensation in Excess of $1,000,000 Final regulations provide guidance related to the limitation on the deduction for employee compensation in excess of $1 million. Specifically, the regulations address: what constitutes a publicly held corporation for purposes of Code Sec. 162(m)(2); the definition of a covered employee for purposes […]

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Additional Final Regulations on Section 163(j) Issued

Additional Final Regulations on Section 163(j) Issued The IRS has issued final regulations providing additional guidance on the limitation on the deduction for business interest under Code Sec. 163(j). The regulations finalize various portions of the proposed regulations issued in 2020 with few modifications. They address the application of the limit in the context of […]

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Final Regulations Address Deductibility of Fines and Penalties

Final Regulations Address Deductibility of Fines and Penalties The IRS has released final regulations that address the changes made to Code Sec. 162(f) by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97), concerning the deduction of certain fines, penalties, and other amounts. The final regulations also provide guidance relating to the information reporting […]

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Safe Harbor for Electing Real Property Trade or Business

Safe Harbor for Electing Real Property Trade or Business The IRS has provided a safe harbor allowing a trade or business that manages or operates a qualified residential living facility to be treated as a “real property trade or business” solely for purposes of qualifying to make the Code Sec. 163(j)(7)(B) election. This guidance formalizes […]

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Final Regulations Released on Small Business Simplified Accounting Rules

Final Regulations Released on Small Business Simplified Accounting Rules The IRS has released final regulations addressing the post-2017 simplified accounting rules for small businesses. The final regulations adopt and modify proposed regulations released in August 2020. Implementation of the Rules The Tax Cuts and Jobs Act ( P.L. 115-97) put in place a single $25 […]

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