Weekly IRS Roundup December 13 – December 17, 2021

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Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 13, 2021 – December 17, 2021. 

December 13, 2021: The IRS published a memorandum concerning its commitment to creating an environment conducive to civility, which includes mutual respect, politeness and fairness. The IRS stated that acting with civility and treating others with respect furthers confidence in the legal system, thus enhancing the quality of justice. The memorandum also stated that the IRS’s sole objective is to reach the correct result.

December 13, 2021: The IRS issued a news release announcing that it joined with several leading nonprofits to highlight a special tax provision that allows more people to deduct donations to qualifying charities on their 2021 federal income tax return.

December 14, 2021: The IRS released a practice unit, providing an overview of base erosion anti-abuse tax under Section 59A after issuance of final regulatory packages in 2019 and 2020.

December 14, 2021: The IRS released a practice unit, addressing the general process for determining if a nonresident alien (NRA) student, trainee, teacher or researcher is eligible to claim a treaty-based exemption on Form 1040NR or Form 1040NR-EZ for income received that is effectively connected with a US trade or business.

December 14, 2021: The IRS released a practice unit, guiding examiners through the procedures for properly conducting promoter investigations. The goal of a promoter investigation is to identify and quickly terminate the abusive promotion or activity, assert promoter penalties where applicable and identify participants in the abusive transaction.

December 14, 2021: The IRS released a practice unit, reflecting the recently finalized Treasury Regulation 1.861-9 (regarding interest expense apportionment) and addressing the impact of flow-through entities on the foreign tax credit. The concept unit is applicable to individual taxpayers who receive Schedule K-1(s) from partnerships or S corporations that report foreign income, related deductions and taxes. Members of limited liability companies who file a Form 1065 and beneficiaries of a trust who file a Form 1041 are also subject to the rules discussed in the practice unit.

December 14, 2021: The IRS released a practice unit, explaining the process for calculating the interest due under Section 453A on a deferred tax liability in installment sales transactions.

December 14, 2021: The IRS published a news release announcing that victims of tornadoes in Kentucky will have until May 16, 2022, to file various individual and business tax returns and make tax payments.

December 14, 2021: The IRS published a revenue ruling, providing various prescribed rates for federal income tax purposes for January 2022.

December 15, 2021: The IRS published a notice concerning procedures under Section 446 of Section 1.446-1(e) of the Income Tax Regulations for obtaining automatic consent from the IRS to change methods of accounting to comply with the final regulations under Sections 263A, 448, 460 and 471 issued on January 5, 2021 (T.D. 9942).

December 15, 2021: The IRS published a notice and request for comments concerning guidance for taxpayers regarding information collection requirements related to requests for ruling and determination letters. Comments are due on or before February 14, 2022.

December 15, 2021: The IRS published Revenue Procedure 2021-51, which updates Revenue Procedure 2020-54 and identifies circumstances under which the disclosure on a taxpayer’s income tax return, with respect to an item or position, is adequate for the purpose of reducing the understatement of income tax under Section 6662(d) (relating to the substantial understatement aspect of the accuracy-related penalty), and for the purpose of avoiding the tax return preparer penalty under Section 6694(a) (relating to understatements due to unreasonable positions) with respect to income tax returns.

December 16, 2021: The IRS published a news release announcing that the publicly available data it provides on electronically filed Form 990 in a machine-readable format will be available solely on the Tax Exempt Organization Search webpage.

December 16, 2021: The IRS published draft instructions for certain information returns to primarily reflect electronic filing requirements.

December 17, 2021: The IRS published a notice concerning the issuance of the 2022 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

December 17, 2021: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to Robbie Alipour in our Chicago office for this week’s roundup.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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