Tax News & Views It's All Happening Roundup

IRS Wants to Release Guidance on R&D Accounting Before Year-End - Lauren Vella, Bloomberg ($):

The Treasury Department and IRS plan on releasing procedural guidance for taxpayers who must make an accounting method change due to research and development amortization before the new year, a Treasury official said.

Tim Powell, a tax policy adviser at Treasury, said Wednesday during a virtual conference hosted by the American Bar Association’s tax section that the agencies intend to release procedural guidance that will allow taxpayers to make automatic accounting changes to amortize their R&D expenditures.

“I think we’re trying to get that out as soon as possible,” Powell said. “Our hope is to get it out before year-end.”

SECURE 2.0 ‘Grab-Bag’ Retirement Guidance Coming Soon, IRS Says - Austin Ramsey, Bloomberg ($):

The IRS is prioritizing “grab-bag” guidance it intends to issue regarding private-sector pension plans as they implement dozens of new provisions under a sweeping retirement access law Congress passed late last year.

SECURE 2.0 Act (Pub. L. No. 117-328) provisions that will be addressed in the “imminent” guidance include cash incentives for participating in employer-sponsored plans and employer tax credits for newly sponsored plans, William Evans, a US Treasury Department attorney-adviser, said Thursday at a virtual conference hosted by the American Bar Association’s tax section.

Charitable Remainder Annuity Trust Rules Expected, Treasury Says - Erin Slowey, Bloomberg ($):

The IRS will name certain uses of charitable remainder annuity trusts as listed transactions in upcoming proposed regulations, a Treasury Department official said Thursday.

The IRS has intensified its efforts to crack down on schemes that help taxpayers dodge taxes by continuing to add to its list of avoidance transactions and releasing proposed rules to identify the schemes.

IRS Hikes User Fees for Enrolled Actuaries in Final Rules - Erin Slowey, Bloomberg ($):

The IRS nearly tripled the enrollment and renewal of enrollment fees for enrolled actuaries in final regulations released on Thursday.

The fees for actuaries increased for the first time since 2007, to $680 from $250, according to the rules (TD 9982, RIN 1545-BQ26).

The document is here.

IRS launches new initiatives using Inflation Reduction Act funding to ensure large corporations pay taxes owed; continues to improve service and modernize technology with launch of business tax account – IRS:

Following a dramatically improved 2023 filing season thanks to Inflation Reduction Act (IRA) investments, the Internal Revenue Service has targeted IRA resources on strengthening enforcement, with announcements on new initiatives to pursue high-income, high-wealth individuals who do not pay overdue tax bills and complex partnerships.

Today the IRS announced new initiatives to ensure large corporations pay taxes owed. As these initiatives to improve compliance among high-income individuals, complex partnerships and large corporations ramp up, the IRS is continuing its work to improve customer service and modernize core technology infrastructure, most notably with the launch of business tax account.

DOJ Says No Need for Supreme Court Review of IRS Summons Case – Tax Notes($):

In a brief for the Supreme Court, the government opposed the Delaware Department of Insurance’s petition for review of a Third Circuit decision that upheld the enforcement of an IRS summons for information on captive insurance companies, arguing that a state law on confidentiality did not reverse-preempt the IRS’s summons authority.

Senate Tax Panel Introduces US-Taiwan Tax Relief Bill – Dylan Moroses, Law360 Tax Authority ($):

The top Democrats and Republicans on the Senate Finance and House Ways and Means committees introduced legislative text Thursday of a bill to provide double-taxation relief and other treaty-like benefits for Taiwanese businesses investing in the U.S.

Rep. Jason Smith, R-Mo., the House Ways and Means Committee chairman, and the panel's ranking member, Rep. Richard Neal, D-Mass., formally introduced the text of the bill, the United States-Taiwan Expedited Double-Tax Relief Act, with Senate Finance Committee Chairman Ron Wyden, D-Ore., and ranking member Sen. Mike Crapo, R-Idaho…

Following passage of the legislation in the Finance Committee, senators told Law360 that they expect passage of the measure before the end of the year.

Could a tax bill with bipartisan, bicameral support become a vehicle to pass other tax measures?

Capitol Hill Recap: Speaker Vote on Ice? – Jay Heflin, Eide Bailly:

A tax bill that goes to the floor can have additional tax provisions added to them.

Could additions include R&D expensing, expanding the interest deduction, and upping Bonus Depreciation to 100%? Yes. These provisions would be germane additions. Will they be added, probably not.

Legislative outlook: Getting these provisions added to the Taiwan bill would likely require including an expansion to the Child Tax Credit and upping the SALT cap to something above $10,000. These measures do not have bipartisan, bicameral support and, if added to the Taiwan tax bill, would hurt its chance for enactment. In other words, it is unlikely that the aforementioned business tax provisions will be added to the Taiwan tax bill.

From the “What Filing?” file:

‘As if they were never filed’: IRS outlines steps to withdraw ERC claims – Martha Waggoner, Journal of Accountancy:

Certain employers concerned about the accuracy of an employee retention credit (ERC) claim they filed now have a way to withdraw their claim and avoid future repayment, interest, and penalties.

The IRS on Thursday released details of a special process for eligible employers to withdraw ERC claims that have been filed but for which the employer has not received a refund, including information on which employers are eligible to withdraw claims and the claim withdrawal procedure. Claims that are withdrawn will be treated as if they were never filed.

However, those who willfully filed a fraudulent claim, or those who assisted or conspired in the filing of such claims, will still be subject to possible criminal investigation and prosecution, the IRS said.

Yesterday’s Roundup has the details on withdrawing a claim and it is here.

The IRS move seems to be quite popular:

IRS Earns Praise for ERC Claim Withdrawal Initiative – Lauren Loricchio, Tax Notes ($):

An IRS initiative that will allow businesses to withdraw questionable employee retention credit claims is being hailed as a positive development that could help taxpayers and the IRS alike.

The agency is providing a withdrawal option for “small business owners and others who were pressured or misled by ERC marketers or promoters into filing ineligible claims,” according to an October 19 IRS news release that was previewed the previous day at the American Bar Association Virtual Fall Tax Meeting. Claims that are withdrawn will be treated as though they were never filed, allowing businesses to avoid potential repayment, interest, and penalties if their claim doesn’t pass muster.

Happy National Chicken and Waffles Day! Question: Is it breakfast or lunch? Answer: Both!