Document summaries for the week of Feb. 12, 2018

EMPLOYEE BENEFITS

IRS issues monthly corporate yield curve and segment rates

The IRS issued guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Sec. 417(e)(3), and the 24-month average segment rates under Sec. 430(h)(2). In addition, the IRS provided guidance as to the interest rate on 30-year Treasury securities under Sec. 417(e)(3)(A)(ii)(II), as in effect for plan years beginning before 2008, and the 30-year Treasury weighted average rate under Sec. 431(c)(6)(E)(ii)(I). Notice 2018-16 (2/14/18).

 

INDIVIDUALS

Taxpayer liable for deficiency for failing to report wages

The Tax Court held that a taxpayer was liable for a tax deficiency for failing to report wages of $9,999. The court noted that the IRS’s concession of certain issues did not destroy the presumption of correctness of its notice of deficiency to the taxpayer as to the remaining issues, nor was the IRS precluded from assessing a deficiency for the year at issue by the taxpayer’s having received a refund. Krantz, T.C. Memo. 2018-17 (2/14/18).

 

INTERNATIONAL

IRS modifies circumstances under which certain foreign corporations can change accounting periods

The IRS modified the circumstances under which it will grant approval of requests by certain foreign corporations to change their annual accounting periods under Rev. Procs. 2002-39 and 2006-45. The IRS did so under Sec. 965(o) to prevent avoidance of the purposes of Sec. 965 through changes in the tax years of certain specified foreign corporations. Rev. Proc. 2018-17 (2/13/18).

 

IRS PROCEDURE

IRS issues March 2018 applicable federal rates

The IRS issued a ruling that prescribes the applicable federal rates for March 2018, including the applicable and adjusted applicable federal interest rates, the adjusted federal long-term rate, and the long-term tax-exempt rate. Rev. Rul. 2018-06 (2/16/18).

 

PARTNERSHIPS

Forfeit of deposit does not produce capital gain

The Eleventh Circuit affirmed a Tax Court decision that a forfeited deposit received by a partnership from a canceled sale of real property was ordinary income. CRI-Leslie, LLC, No. 16-17424 (11th Cir. 2/15/18).

Newsletter Articles

SPONSORED REPORT

Tax reform changes are now in effect

With all the recent tax law changes, this year it’s more important than ever to make sure your clients’ tax situations are squared away before year end. This report provides necessary guidance to ensure 2019 starts without a hitch.

DEDUCTIONS

Understanding the new Sec. 199A business income deduction

The new deduction allows certain business owners to keep pace with the significant corporate tax cut provided by the Tax Cuts and Jobs Act.