News & Analysis as of

Tax Talk -- Volume 7, No. 1 -- April 2014

In This Issue: - FATCA Update: IRS Releases New Regulations, New Forms, and New IGAs - No Rule Policy on MLPs - IRS Introduces New Grandfather Rule for Equity-Linked Instruments Under Section 871(m) - Rev....more

BankinBits First Quarter Recap

The BankinBits blog, which discusses recent developments in the banking industry, has within the first quarter of 2014 addressed a diverse range of topics including banking services for the marijuana industry, the shuttering...more

The Affordable Care Act—Countdown to Compliance for Employers, Week 37: Stalking the Elusive “Variable Hour Employee”

For “applicable large employers” (i.e., generally, those employers who employed an average of at least 50 full-time employees on business days during the preceding calendar year), determining which employees are “full-time”...more

IRS Offers Two New Due Diligence Safe Harbor Procedures for Accepting Rollovers into Qualified Plans

On April 3, 2014, the Internal Revenue Service released Revenue Ruling 2014-9 (the Ruling), which provides guidance helpful to the administration of rollovers by tax-qualified retirement plans by...more

After Boardwalk: The IRS Issues Safe Harbor Guidance for Historic Tax Credit Transactions

Immediately upon its publication, The United States Court of Appeals for the Third Circuit’s decision in Historic Boardwalk Hall, LLC v. Commissioner, 694 F.3d 425 (3d Cir. 2012), cert. denied, 133 S. Ct. 2734 (2013) put...more

New IRS Guidance Offers Insight Regarding Covered Transactions Under the Transaction Cost Regulations

When the IRS released the transaction cost regulations of Treas. Reg. 1.263(a)-5, a new term was created: “covered transaction.” Unlike the treatment of a covered transaction in a tax shelter context, which is generally...more

Complying With The Tangible Property Regulations – Procedural Guidance Provides Favorable Rules That Require Immediate...

Late last year, the IRS and Treasury Department released final and proposed regulations that affect the tax treatment of costs associated with plants, buildings, equipment, and machinery. These rules affect the costs...more

IRS Addresses Correction Method For Failure To Timely Provide Safe Harbor 401(k) Notice

In its retirement plan newsletter, the IRS stated that plan sponsors of safe harbor 401(k) plans who fail to issue safe harbor notices to employees on a timely basis may be required to make different corrections for different...more

IRS Changes Course And Provides Safe Harbor For "Real Estate Professionals" In Net Investment Tax Final Regulations

Section 1411 of the Patient Protection and Affordable Care Act (the "ACA") levies a new 3.8% tax on "net investment income" (the "NII Tax"). Among other things, the net investment income subject to the NII Tax includes...more

Final ACA Shared Responsibility Regulations Released

Plan sponsors now have the final piece of the puzzle needed to finalize their 2015 pay-or-play strategies. The Internal Revenue Service (IRS) and the U.S. Department of the Treasury recently issued the highly...more

IRS Provides Discharge of Indebtedness Safe Harbor for Debt Secured by Interest in Disregarded Entity Holding Real Property

In general, discharge of indebtedness income is excluded from the gross income of a taxpayer (other than a C corporation) if the indebtedness is qualified real property business indebtedness (QRPBI). To qualify as QRPBI, the...more

IRS Final Rule Partially Delays ACA Employer Shared Responsibility Requirement

On January 10, 2014, the Internal Revenue Service (IRS) released final regulations governing the employer shared responsibility provisions of the Affordable Care Act (ACA). The final rule addresses application of the...more

IRS Provides Safe Harbor for Exclusion from Cancellation of Indebtedness Income

Rev. Proc. 2014-20, released on February 5, provides guidance regarding whether debt secured by an interest in a disregarded entity that holds real estate — rather than by the real estate itself — qualifies for the exclusion...more

IRS Issues Long-Promised Guidance Following Historic Boardwalk Decision

To welcome in the new year, the Internal Revenue Service (the “IRS”) issued Rev. Proc. 2014-12, 2014-3 I.R.B. 415, to provide administrative guidance to the federal historic tax credit industry in the aftermath of the Third...more

IRS Creates New Disregarded Entity Exclusion from Debt Cancellation Income

The IRS has announced a new safe harbor from the discharge of debt income rules. Debt that is cancelled, discharged or forgiven is generally taxable as income, but there are exceptions. Under one exception, certain...more

Safe Harbors for Rehabilitation Tax Credits

On December 30, 2013, the Internal Revenue Service issued much anticipated guidance, in the form of Revenue Procedure 2014-12, providing a safe harbor under which it will not challenge a partnership’s allocations of...more

New Guidance on Historical Rehabilitation Credits May Indicate Tougher Safe Harbors for Other Investment Tax Credits in the Future

On December 30, 2013, the Internal Revenue Service (the “IRS”) released Revenue Procedure 2014-12, which sets out a new “safe harbor” for allocations of the historical rehabilitation credit (the “HRC”) among partners in a...more

IRS Revises Historic Tax Credit Revenue Procedure

Revenue Procedure 2014-12 provides a safe harbor for historic tax credit (i.e., the Section 47 rehabilitation tax credit) partnership transactions. On January 8, the IRS issued a revised version of it that provides a...more

IRS Issues Important Historic Rehabilitation Tax Credit Guidance

Background - On December 30, 2013, the Internal Revenue Service issued its long-awaited historic rehabilitation tax credit guidance in the form of a Revenue Procedure that outlines a safe harbor for allocations of the...more

IRS Publishes Safe Harbor for Monetizing Certain Tax Credits

Following Historic Boardwalk Hall LLC v. Commissioner, 694 F.3d 425 (3d Cir. 2012), which rejected a partnership's allocation of rehabilitation tax credits to a purported partner, the Internal Revenue Service (IRS) recently...more

Informal Clarification of Historic Tax Credit Safe Harbor

Informal conversations with the drafters of Revenue Procedure 2012-14 (the “Revenue Procedure”) have clarified the safe harbor’s pretax economics requirements. The Revenue Procedure is available below....more

Contemplating IRS Safe Harbor for Rehabilitation Credits and Its Impact on the Energy Investment Tax Credit

The IRS recently issued Revenue Procedure 2014-12, providing a safe harbor under which the IRS will not challenge partnership allocations of “section 47” federal rehabilitation tax credits. In the aftermath of the IRS’s win...more

IRS Guidance for Historic Tax Credit Transactions: Partnership Flips and Inverted Leases

The IRS released Revenue Procedure 2014-12 on December 30. It is available below. It addresses the structuring of historic tax credit transactions (i.e., transactions involving rehabilitation tax credits provided for in...more

New IRS Guidance on Same-Sex Spouses and Cafeteria Plans

Action by December 31st Required for Safe Harbor - Yesterday, the IRS issued specific guidance on how employers can address issues arising from the change in tax treatment for same-sex spouses under cafeteria plans. ...more

Monthly Benefits Update - November 2013

Health & Welfare Plans - Health Care Reform: Supreme Court Grants Review to Two Cases Challenging ACA’s Contraception Coverage Mandate - The United States Supreme Court has agreed to hear two cases challenging...more

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