Document Summaries for the week of Aug. 8, 2022
Tax document summaries for the week of Aug. 8, 2022, covering IRS procedure and legislation.
Chief Counsel's Office addresses types of statements subject to Sec. 6700 penalty
The Office of Chief Counsel responded to a request for guidance on the Sec. 6700 penalty relating to the organization or participation in an abusive tax shelter. The Chief Counsel's Office advised that the Sec. 6700 penalty applies to a promoter who, in connection with the organization or sale of an interest in the tax shelter, makes or furnishes (or causes another person to make or furnish) a statement with respect to: (1) the allowability of any deduction or credit; (2) the excludability of any income; or (3) the securing of any other tax benefit, by reason of holding an interest in the entity or participating in the plan or arrangement that the promoter knows or has reason to know is false or fraudulent as to any material matter. Further, the Chief Counsel's Office noted, a "statement" includes those directly addressing the availability of tax benefits and those concerning factual matters that are relevant to the availability of tax benefits. In determining whether there is reason to know, courts have looked to what a reasonable person in a defendant's subjective position would have discovered. CCA 202232015 (8/12/22).
IRS releases information security plan for tax professionals
The IRS posted a resource for tax professionals to use when implementing or improving their written information security plan, which is required under federal law. Creating a Written Information Security Plan for Your Tax & Accounting Practice (8/9/22) (see related news story).
Congress enacts tax and climate bill
Congress enacted a bill that includes a 15% corporate minimum tax, an extension of temporarily expanded eligibility for premium tax credits, and a 1% excise tax on corporations applying to repurchases of their stock. Inflation Reduction Act, H.R. 5376 (8/12/22) (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.