AICPA Tax Insider (Apr. 23, 2020): IRS Stimulus Website, PTIN Fees, Taking Retroactive 100% Bonus Depreciation on QIP and More

IRS launches website for tracking stimulus payments

The IRS announced the launch of its “Get My Payment” website, which is designed to permit people who filed tax returns to enter their direct deposit information and check the status of their $1,200 stimulus payment.

PTIN fee will be lower when it is reinstated

The IRS has proposed to lower the fee it charges for preparer tax identification numbers (PTINs) when PTIN fees are reinstated.

How to take retroactive 100% bonus depreciation on QIP

The IRS issued procedures for how taxpayers can take advantage of the recently enacted technical correction to the rules for qualified improvement property (QIP).

IRS posts FAQs on paid sick and family leave

The IRS posted and updated 67 FAQs about the employer tax credits for paid sick and family leave enacted in the Families First Coronavirus Response Act.

SSI recipients to receive stimulus payments; dependent payments require extra step

The IRS announced that Supplemental Security Income (SSI) recipients will receive automatic stimulus payments, but some taxpayers need to enter information about qualifying children.

Veterans Affairs recipients to receive automatic economic impact payments

Recipients of Veterans Affairs benefits were added to the list of individuals who will automatically receive economic impact payments, the IRS announced.

AICPA Document Summaries Week of 2020.04.20


FAQs on taxability of payroll support for air carriers

The IRS posted FAQs regarding the taxability of payments to passenger air carriers, cargo air carriers, and certain contractors under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. The payments must be exclusively used for the continuation of payment of employee wages, salaries, and benefits. As compensation, Treasury may receive warrants, options, preferred stock, debt securities, notes, or other financial instruments issued by a company receiving the payments. Payroll Support for Air Carriers and Contractors under the CARES Act Freque[n]tly Asked Questions (4/21/20).


IRS issues procedures for nonfilers to claim economic impact payment

The IRS is providing two 2019 tax return filing procedures for eligible individuals who voluntarily wish to file a federal income tax return only for the purpose of receiving the 2020 economic impact payment provided for in Sec. 6428 as a result of the Coronavirus Aid, Relief, and Economic Security Act, P.L. 116-136 — a simplified procedure and a special procedure for people with zero adjusted gross income. According to the IRS, because certain individuals entitled to the payments might not be required to file tax returns, the IRS lacks the necessary information to make the allowed payments in calendar year 2020 to those eligible individuals. Rev. Proc. 2020-28 (4/20/20) (see related news story).

Court sustains levy on taxpayer’s state income tax refund

The Tax Court granted summary judgment to the IRS and sustained a levy on a delinquent taxpayer’s state income tax refund. The court rejected the taxpayer’s suggestion that the court possibly abate the interest assessment on her delinquent taxes or enter into an installment agreement after noting that she had not requested interest abatement or proposed an installment agreement during her Collection Due Process hearing and thus those matters were not subject to court review. Etoty, T.C. Memo. 2020-49 (4/20/20).

Taxpayer who received retirement plan distribution at age 59 is subject to Sec. 72(t) penalty

The Tax Court held that a couple were liable for the 10% additional tax under Sec. 72(t) as a result of the husband’s receiving a distribution from a qualified retirement plan when he was age 59 but had not yet reached age 59½. The court rejected the couple’s argument that the exception in Sec. 72(t)(2)(A)(v) for distributions to an employee who separates from service after attaining age 55 applied after noting that the taxpayer had been generally unemployed since age 46. Laue, T.C. Summ. 2020-14 (4/20/20).

IRS guidance provides relief with respect to ‘substantial presence test’

The IRS is providing relief to certain individuals who did not anticipate meeting the “substantial presence test” under Sec. 7701(b)(3) to become residents of the United States for federal income tax purposes during 2020 because of travel and related disruptions resulting from the global outbreak of the COVID-19 virus. The IRS is providing procedures for eligible individuals to (1) claim a COVID-19 medical condition travel exception and (2) determine whether they qualify for benefits under a U.S. income tax treaty with respect to income from dependent personal services performed in the United States. Rev. Proc. 2020-20 (4/21/20) (see related news story).


IRS waives Sec. 911 time requirements for certain individuals for 2019 and 2020

As a result of the COVID-19 pandemic’s creating an adverse condition that precludes the normal conduct of business globally, the IRS is waiving the time requirements in Sec. 911(d)(1) that determine whether an individual is qualified to elect to exclude from gross income the individual’s foreign earned income and housing cost amount. The waiver applies to any individual who reasonably expected to meet the eligibility requirements of Sec. 911(d)(1) during 2019 or 2020 but failed to do so because the individual departed a foreign country on or after a specified date. Rev. Proc. 2020-27 (4/21/20) (see related news story).


Action on decision in Rothkamm case

The IRS announced its acquiescence to the holding in Rothkamm, 802 F.3d 699 (5th Cir. 2015), that the term “taxpayer” in Sec. 7811 can be broadly interpreted to include a wrongful-levy claimant. However, the IRS did not acquiesce to the holding in that case that Sec. 7811(d) suspends the running of the limitation period for third parties to file wrongful-levy claims or suits. Action on Decision 2020-3 (4/20/20).

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.

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