AICPA Tax Insider (July 2, 2020): Like Kind Exchange Quiz; Rollover Relief for RMDs; July 15, 2020 is final tax deadline and more

Quiz: Like-kind exchanges

By James A. Beavers, CPA, CGMA, J.D., LL.M.

Find out how much you know about this useful tax deferral tool.

Rollover relief for required minimum distributions

The IRS provides relief for taxpayers who had already taken required minimum distributions (RMDs) before the CARES Act suspended the RMD requirement for 2020 in response to the coronavirus pandemic and its effect on taxpayers and the stock market.

IRS will not postpone July 15 deadline

The IRS announced that it will not further postpone federal tax filing and payment deadlines beyond July 15.

July 15 filing date — Not to move

By Edward S. Karl, CPA, CGMA, and Christopher W. Hesse, CPA

Find out why the AICPA, after surveying our members, supports the IRS decision to leave things as they are.

Tax savings opportunities from the CARES Act

By John Werlhof, CPA

In response to the pandemic, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act, which has many tax relief provisions for individuals and businesses besides the recovery rebates. Here’s what those entail.

RIC shareholders can take Sec. 199A deduction for REIT dividends

The IRS issued final regulations allowing regulated investment companies (RICs) to report qualified real estate investment trust (REIT) dividends as Sec. 199A dividends to their shareholders.

AICPA DOCUMENT SUMMARIES WEEK OF JUNE 29, 2020

EMPLOYEE BENEFITS

Guidance on midyear amendment to safe harbor Sec. 401(k) or 401(m) plans

The IRS issued a notice clarifying the requirements that apply to a midyear amendment to a safe-harbor Sec. 401(k) or 401(m) plan that reduces only contributions made on behalf of highly compensated employees. In the notice, the IRS also provided temporary relief in connection with the ongoing COVID-19 pandemic from certain requirements that would otherwise apply to a midyear amendment to a safe-harbor Sec. 401(k) or 401(m) plan adopted between March 13, 2020, and Aug. 31, 2020, that reduces or suspends safe-harbor contributions. Notice 2020-52 (6/29/20).

EMPLOYMENT TAXES

IRS revises rules and specifications for substitute Form 941

The IRS issued the latest revision of IRS Publication 4436, General Rules and Specifications for Substitute Form 941, Schedule B (Form 941), Schedule D (Form 941), Schedule R (Form 941), and Form 8974, superseding Rev. Proc. 2018-24. Rev. Proc. 2020-31 (6/29/20).

INDIVIDUALS

Child-related deductions negated by failure to attach Form 8332 to return

The Tax Court held that, because the noncustodial parent of two children did not attach to her 2014 tax return a Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, she was not entitled to claim a dependency exemption or child tax credit with respect to those two children; nor was she entitled to head-of-household filing status. The court noted that, while the children’s father subsequently gave the noncustodial parent a signed Form 8332, he did not file an amended return disclaiming his previous claim of the children as dependents. Bethune, T.C. Memo. 2020-96 (6/30/20).

Taxpayer failed to rebut IRS’s deficiency determinations

The Tax Court held that a taxpayer was liable for tax deficiencies assessed by the IRS because she offered no evidence rebutting disallowed deductions or her receipt of income third-party sources reported to the IRS. The court upheld accuracy-related penalties for the years at issue. Francois, T.C. Summ. 2020-18 (6/30/20).

IRS did not abuse its discretion in sustaining federal tax lien

The Tax Court held that a taxpayer was not entitled to challenge his underlying tax liabilities where his Tax Court petition was not timely filed. The court further held that the IRS did not abuse its discretion by sustaining a Notice of Federal Tax Lien where the taxpayer did not timely submit documents and additional amended returns that the IRS had requested. Nguyen, T.C. Memo. 2020-97 (6/30/20).

IRS PROCEDURE

Tax deadline to remain July 15

The IRS announced that tax filing and payment deadlines will not be further postponed past July 15, 2020. IR-2020-134(6/29/20) (see related news story).

IRS announces tax relief for South Carolina storm victims

The IRS announced that victims of the severe storms, tornadoes, and straight-line winds that began on April 12, 2020, in South Carolina may qualify for tax relief. SC-2020-01 (6/30/20).

STATE & LOCAL TAXES

State tax credit program is unconstitutional

The U.S. Supreme Court held that a state program that grants tax credits to those who donate to organizations that award scholarships for private school tuition violated the Free Exercise Clause of the First Amendment of the U.S. Constitution because the program prohibited families from using the scholarships at religious schools. Espinoza v. Montana Dep’t of Rev., No. 18-1195 (U.S. 6/30/20).

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

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