Document summaries for the week of Dec. 21, 2020
Tax document summaries for the week of Dec. 21–25, 2020, covering employee benefits, IRS procedure, and more.
IRS extends temporary relief from the physical presence requirement for spousal consents under qualified plans
In response to the continuing public health emergency caused by the COVID-19 pandemic, and the related social distancing that has been implemented, the IRS has extended from Jan. 1, 2021, through June 30, 2021, the temporary relief provided in Notice 2020-42, from the physical presence requirement in Regs. Sec. 1.401(a)-21(d)(6) for participant elections required to be witnessed by a plan representative or a notary public, including the spousal consent required under Sec. 417. The IRS is soliciting comments with respect to the relief and whether it should be made permanent. Notice 2021-03 (12/22/20).
IRS announces 2021 standard mileage rates for business, medical, and moving expenses
The IRS issued the optional standard mileage rates for 2021 for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, 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) 56 cents per mile driven for business use, down 1.5 cents from the 2020 rate, (2) 16 cents per mile driven for medical or moving purposes, down 1 cent from the 2020 rate, and (3) 14 cents per mile driven in service of charitable organizations, a rate that remained unchanged and is set by Sec. 170(i). Notice 2021-02 (12/22/20) (see related news story).
Final regs. on misdirected refunds
The IRS issued final regulations implementing procedures to identify and recover tax refunds issued by electronic funds transfer (direct deposit) that were not delivered to the account designated to receive the direct deposit refund on the federal tax return or other claim for refund. T.D. 9940 (12/21/20) (see related news story).
Final extension of temporary relief for fuel removals destined for nontaxable use due to West Shore Pipeline shutdown
The IRS granted the final extension of the temporary dyed fuel relief initially provided for in Notice 2017-30. The final extension of the temporary dyed fuel relief will begin on Jan. 1, 2021, and end on Dec. 31, 2021, and a claimant may submit a refund claim for the Sec. 4081(a)(1) tax imposed on undyed diesel fuel and kerosene for fuel that is (1) removed from a Milwaukee or Madison terminal; (2) entered into a Green Bay terminal within 24 hours of removal from the Milwaukee or Madison terminal; and (3) subsequently dyed and removed from that Green Bay terminal. Notice 2021-04 (12/22/20).
Year-end legislation contains tax provisions
Congress passed legislation that contained numerous tax provisions, including pandemic relief and extensions of expiring provisions. Consolidated Appropriations Act, 2021 (12/21/20) (see related news story).
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.