Document summaries for the week of Dec. 6, 2021

EMPLOYEE BENEFITS

Regulations require health care spending reporting from insurers

The IRS issued temporary and proposed regulations requiring group health plans and health insurance issuers in the group and individual markets to report information about prescription drugs and health care spending to the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury. T.D. 9958; REG-117575-21 (12/6/21).

EXEMPT ORGANIZATIONS

IRS lists organizations that no longer qualify as tax-exempt organizations

The IRS issued a list of organizations for which it has revoked its determination that they qualify as organizations described in Secs. 501(c)(3) and 170(c)(2). Announcement 2021-15 (12/6/21).

INDIVIDUALS

Court refuses to dismiss case involving taxpayer's innocent spouse claim

In a procedurally complex case, the Tax Court held that, where a district court acquires jurisdiction in a taxpayer's refund suit, it acquires jurisdiction over the entire liability for the tax year involved in the suit including the taxpayer's claim for recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected. Here, the court granted an IRS motion to dismiss for lack of jurisdiction with respect to several years involved in the taxpayer's refund suit but denied, in part, an IRS motion to dismiss as to other years that involved the taxpayer's claim for innocent spouse relief. Coggin, 157 T.C. No. 12 (12/8/21).

Taxpayer not entitled to relief in case involving treatment of community income

The Tax Court held that a taxpayer was not entitled to relief from federal income tax liability under Sec. 66(c), which addresses the treatment of community income, because she was requesting relief from tax on her own income and not her spouse's income. While Rev. Proc. 2013-34 provides exceptions for which the IRS will consider granting relief regardless of whether a deficiency is attributable to a requesting spouse, the Tax Court noted that the taxpayer did not meet any of the exceptions in that revenue procedure. Wheeler, T.C. Summ. 2021-42 (12/9/21).

IRS PROCEDURE

IRS issues guidance on early termination of the employee retention credit

The IRS issued guidance modifying Notice 2021-49 and Notice 2021-24 and implementing the early termination of the employee retention credit (ERC) made by the Infrastructure Investment and Jobs Act, P.L. 117-58, enacted Nov. 15, 2021. The notice provides the steps taxpayers (other than startup recovery businesses) need to take as a result of the early termination of the ERC and provides penalty relief for employers that received a fourth-quarter ERC for which they were ineligible as a result of the passage of the Infrastructure Investment and Jobs Act. Notice 2021-65 (12/6/21) (see related news story).

IRS complied with Sec. 6330 notice and determination requirements

The Fifth Circuit held that a taxpayer had not demonstrated that the IRS failed to comply with the notice and determination requirements of Sec. 6330 and affirmed a Tax Court decision against him. Spagnoletti, No. 21-60135 (5th Cir. 12/6/21).