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Archive for Treasury Regulations

FinCEN Further Restricts North Korea’s Access to the U.S. Financial System and Warns U.S. Financial Institutions of North Korean Schemes

Willliam Byrnes, Tax Advisor

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule under Section 311 of the USA PATRIOT Act that severs Bank of Dandong, a Chinese bank that acts as a conduit for illicit North Korean financial activity, from the U.S. financial system. FinCEN also issued today an advisory to further alert financial institutions to schemes commonly used by North Korea to evade U.S. and United Nations (UN) sanctions, launder funds, and finance the North Korean regime’s weapons programs.

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Treasury Issues Final & Temporary Section 385 Regs

Ron Marini

As part of the Obama administration’s announcement of a crackdown on inversions the U.S. Treasury issued final and temporary proposed regulations that would dramatically change the taxation of corporate debt issued to related corporations having nothing to do with inversions or foreign acquisitions.

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The Service Issues Final Treasury Regulations Governing R&D Tax Credit Claims

Introduction
On October 3rd of 2016, the Internal Revenue Service (hereinafter “the Service”) issued Final Treasury Regulations setting forth guidance on research and development efforts in connection to Internal Use Software (hereinafter “IUS”) for purposes of claiming the Research & Development Tax Credit (hereinafter “RTC”) under I.R.C. § 41.

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QTIP Election Can Be Ignored Where It Was Not Necessary To Reduce The Estate Tax To Zero

Ron Marini

Revenue Procedure 2016-49 provides procedures to disregard and treat as null and void for transfer tax purposes a qualified terminable interest property (QTIP) election in situations where the QTIP election was not necessary to reduce the estate tax liability to zero.

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U.S. Treasury Seeks Comments On Form 8975—CbC Reporting Form

Ron Marini

On May 5, 2016, we posted Possible CbC Optional Reporting for 2016 Under Consideration by US Treasury, which discussed that the Treasury and IRS were working towards a solution that would allow optional country-by-country (CbC) reporting for 2016. Also, more work would be needed to ensure that allowing optional filing for 2016 in the US would be effective in obviating the need for local filing. The Treasury and IRS also requested that U.S. multinational corporations (MNCs) to engage in the global debate to ensure optional CbC reporting will be enough to protect U.S. MNCs from becoming subject to secondary reporting requirements.

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What Does The New U.S. Treasury Model Tax Treaty Mean For You?

John Richardson

On July 12, the U.S. Treasury released its 2016 Model Tax Treaty. I suspect that people will interpret this in terms of how it affects their individual tax situations. This gives a huge clue with respect to information exchange and how the U.S. views “double taxation,” citizenship-based taxation, and related issues.

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The Service Issues New Administrative Authority Governing TPR De Minimis Safe Harbor Limits for Small Businesses

On November 24th of 2015, the Internal Revenue Service (hereinafter the “Service”) streamlined the compliance for the Tangible Property Regulations (hereinafter “TPR”) for small businesses by increasing the safe harbor threshold for deducting certain capital items from $ 500 to $ 2,500 under IRS Notice 2015-82. The scope affects businesses that do not maintain an Applicable Financial Statement (hereinafter “AFS”) such as an audited financial statement. It applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item.

The new $2,500 threshold applies to any such item that is substantiated by an invoice. As a result, small businesses will be able to immediately deduct expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions. The new $2,500 threshold takes effect starting with tax year 2016. Read more

Incorrectly Issued Health Insurance Marketplace Statement Relief – Form 1095A

I had a grEAt conversation with my friend Bob Kerr Friday. We talked about the Department of the Treasury expanding the relief it announced previously on February 24, which will mitigate any harm to tax filers in regards to filing Form 1095A under the Affordable Care Act.

Basically, if you enrolled in Marketplace coverage, received an incorrect Form 1095-A, and filed your return based on that form, you do not need to file an amended tax return.

Additional points Bob brought up include:

• The IRS will not pursue the collection of any additional taxes from you based on updated information in the corrected forms. This relief applies to tax filers who enrolled through the Read more

A Legislative Update from Capitol Hill: Continuing Coverage of 2015 Comprehensive Tax Reform

On Wednesday, March 18th the Republican leaders of Congress’s two main tax committees, the House Ways and Means Committee Chairman Paul Ryan, R-Wis., (hereinafter “Ryan”) and the Senate Finance Committee Chairman Orin Hatch, R-Utah, (hereinafter “Hatch”) wrote a letter to the Treasury Secretary Jacob Lew (hereinafter “Lew”) urging him to avoid pursuing an executive action by President Barack Obama (hereinafter “Obama”) on major tax reform in 2015.

The letter comes in direct response to a statement by the White House Press Secretary Josh Earnest (hereinafter “Earnest”) earlier this month suggesting that Obama might be open to using his executive authority to overhaul the tax code and close select tax loopholes for large corporations. The White House spokesman was probed by a reporter Read more

Getting To Know The Structure of The IRS

The IRS is an agency of the Treasury Department and is charged with the administration of the tax laws. It is the largest government agency in the world. Headed by the Commissioner of Internal Revenue, its structure is as follows:

(1) There are four civil compliance divisions responsible for serving specific groups of taxpayers with similar needs. They are:

a. Wage and Investment Division: This division services 88 million individual taxpayers who have only wage and investment income, almost all of which is reported to the IRS by third-party payors.

b. Small Business Self-employed Division: This division is responsible for taxpayers who Read more

The Department of Treasury Issues New Proposed Treasury Regulations Governing Internal Use Software Research Tax Credit Claims

Introduction

On Friday, January 16th of 2015, The Treasury Department and Internal Revenue Service (hereinafter the “Service”) released for publication in the Federal Register a notice of proposed rulemaking (REG-153656 -03) concerning the application of the credit for increasing research activities pursuant to I.R.C. § 41 for computer software that is developed by or for the taxpayer, for the taxpayer’s internal use.

These Proposed Treasury Regulations have been long-awaited as the Service previously issued Final Treasury Regulations (T.D. 9104) governing many aspects of the Research Tax Credit (hereinafter “RTC”) back in 2003, but deferred addressing the guidelines dealing with Read more

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