Document summaries for the week of Dec. 30, 2019
Tax document summaries for the week of Dec. 30, 2019–Jan. 3, 2020, covering employee benefits, individuals, IRS procedure, and more.
Revised procedures issued for exempt organization employee plan determination letters
The IRS provided revised procedures for determination letters and letter rulings issued by the Tax Exempt and Government Entities Division, Employee Plans Rulings and Agreements Office. Rev. Proc. 2020-4 (1/2/20).
Covered compensation tables issued for 2020 plan year
The IRS issued the tables of covered compensation under Sec. 401(l)(5)(E) for the 2020 plan year. Rev. Rul. 2020-02 (1/3/20).
Revised procedures issued for EO determination letters
The IRS set forth procedures for issuing determination letters on issues under the jurisdiction of the director, Exempt Organizations (EO) Rulings and Agreements. Specifically, it explains the procedures for issuing determination letters on exempt status, private foundation status, and other determinations related to exempt organizations. The revenue procedure also provides guidance on applicable user fees for requesting determination letters. Rev. Proc. 2020-5 (1/2/20).
IRS issues annual international no-rulings list
The IRS updated the list of areas of the Code under the jurisdiction of the associate chief counsel (International) on which the IRS will not issue letter rulings or determination letters. Rev. Proc. 2020-7 (1/2/20).
IRS lowers standard mileage rates for business, medical, and moving expenses for 2020
The IRS issued the optional standard mileage rates for 2020 for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, or medical or moving expense purposes and to use in calculating reductions to basis for depreciation taken under the business standard mileage rate. The rates are (1) 57.5 cents per mile driven for business use, down one-half cent from the rate for 2019; (2) 17 cents per mile driven for medical or moving purposes, down 3 cents from the rate for 2019; and (3) 14 cents per mile driven in service of charitable organizations. Notice 2020-05 (12/31/19) (see related news story).
IRS enters into new Free File agreement
The IRS has entered into a new agreement with Free File Inc. The Service says the updated agreement is designed to make the choices clearer to taxpayers who use the free online tax preparation software through the Free File program. Addendum to the Eighth Memorandum of Understanding on Service Standards and Disputes (12/30/19).
IRS revises letter ruling and information letter procedures
The IRS issued revised procedures for letter rulings and information letters issued by these associate chief counsel offices: Corporate; Financial Institutions and Products; Income Tax and Accounting; International; Passthroughs and Special Industries; Procedure and Administration; and Employee Benefits, Exempt Organizations, and Employment Taxes. The procedure also revises how determination letters are issued by the Large Business and International, Small Business/Self Employed, Wage and Investment, and Tax Exempt and Government Entities divisions. Rev. Proc. 2020-1 (1/2/20).
TAM procedures updated
The IRS explained when and how an associate chief counsel office provides a technical advice memorandum (TAM). It also explained a taxpayer’s rights when a field office requests a TAM. Rev. Proc. 2020-2 (1/2/20).
IRS revises domestic no-rulings list
The IRS provided a revised list of areas of the Code under the jurisdiction of these associate chief counsel offices on which the Service will not issue letter rulings or determination letters: Corporate; Financial Institutions and Products; Income Tax and Accounting; Passthroughs and Special Industries; Procedure and Administration; and Employee Benefits, Exempt Organizations, and Employment Taxes. Rev. Proc. 2020-3 (1/2/20).
Married couple not entitled to deductions or NOL and did not include IRA distributions in income
The Tax Court held that the taxpayers, a married couple, were not entitled to claim various deductions beyond the amount allowed by the IRS on audit because they did not substantiate the expenses; that they could not deduct a net operating loss for 2007; that they failed to include over $200,000 in IRA distributions in income, and that they were liable for the additional 10% tax under Sec. 72(t) on those distributions. The court imposed an accuracy-related penalty and a penalty under Sec. 6673(a) for taking a frivolous or groundless position. The court also refused to grant the wife innocent spouse relief for the years at issue. Gebman, T.C. Memo. 2020-1 (1/2/20).
Business meal deductions after the TCJA
This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.
Quirks spurred by COVID-19 tax relief
This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.