Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of February 10 – 14, 2020.
February 10, 2020: The IRS issued a revenue ruling providing guidance regarding how to determine the adjusted basis life of insurance contracts under IRC section 1011 and 1012 given the recent amendments to IRC section 1016(a), which the Tax Cuts and Jobs Act amended to provide that in determining the basis of a life insurance contract or an annuity contract, no adjustment is made for mortality, expense, or other reasonable charges incurred under the contract. The IRS updated Revenue Ruling 2009-13 and 2009-14 to reflect these changes.
February 10, 2020: The Joint Committee on Taxation released a report addressing domestic corporations’ federal tax receipts and tax liabilities. The report summarized the present law and accounting rules regarding corporate taxation, specifically addressing behavioral responses relating to recent tax changes, including the acceleration of deductions, deferral of income, and treatment of NOLs and NOL carryovers. The House Committee on Ways and Means discussed the report in a public hearing on February 11, 2020.
February 10, 2020: The Treasury published a notice of a current list of countries that require or may require participation in, or cooperation with, an international boycott within the meaning of IRC section 999(b)(3). The countries include Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen.
February 11, 2020: The Joint Committee on Taxation released a report addressing an amendment that would provide for additional reporting by certain investors with respect to certain specified medical care providers. Under the proposal, reporting persons are required to file annual information returns with respect to certain specified medical care providers in which the reporting person holds an interest. The House Committee on Ways and Means discussed the report in a public hearing on February 12, 2020.
February 13, 2020: The IRS published proposed regulations that provide guidance for employers concerning the amount of federal income tax to withhold from employee’s wages, implementing recent changes due to the Tax Cuts and Jobs Act and the redesigned 2020 Form W-4 and related IRS publications. In a related news release, the IRS stated that employees who have a Form W-4 on file with their employer from years prior to 2020 generally will continue to have their withholding determined based on that form.
February 14, 2020: The IRS released final regulations to correct final regulations contained in T.D. 9891, which was published on January 23, 2020, and provided guidance applicable to transfers of appreciated property by US persons to partnerships with foreign partners related to the transferor. The regulations are scheduled to be published in the Federal Register on February 18, 2020.
February 14, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Jenni Saperstein in our Chicago office for this week’s roundup.