Item for Thursday, December 14, 2023
FinCEN Issues Updated FAQs on Beneficial Ownership Information Reporting: The Financial Crimes Enforcement Network (FinCEN) has updated its frequently asked questions (FAQs) on the beneficial ownership information (BOI) reporting requirements that will take effect on 1/1/24. Enacted as part of the Corporate Transparency Act, certain business entities created or registered to do business in the United States will be required to report identifying information about the beneficial owners to FinCEN. Under FinCEN’s rules, a beneficial owner is the individual or individuals who ultimately own or control the company. The updated FAQs include new information about the reporting process, reporting companies, reporting requirements, initial reports, updated reports, compliance/enforcement, FinCEN identifiers (a unique code that can identify a beneficial owner without having to disclose all their identifying information), and third-party service providers. The updated FAQs can be accessed on the FinCEN website at: https://www.fincen.gov/boi-faqs . FinCEN expects to publish further guidance in the future. Beneficial Ownership Information Reporting Frequently Asked Questions .
Item for Wednesday, December 13, 2023
IRS to Issue Proposed Regulations Addressing the GloBE Model Rules: The IRS has released Notice 2023-80, announcing that it will issue proposed regulations addressing how certain IRC provisions, including the foreign tax credit rules and dual consolidated loss rules, apply to certain types of taxes described in the Global Anti-Base Erosion (GloBE) model rules. Notice 2023-80 also extends the temporary relief period in Notice 2023-55, allowing taxpayers to defer application of the 2022 final foreign tax credit regulations and continue to treat foreign taxes that were creditable under the prior regulations as such through the end of 2023. The Notice also addresses the application of temporary relief in Notice 2023-55 to partnerships and their partners. Taxpayers may rely on the guidance described in the Notice for tax years ending after 12/11/23 and on or before the date the proposed regulations are published in the Federal Register. The IRS is requesting comments, which should be submitted by 2/9/24. Notice 2023-80.
Item for Tuesday, December 12, 2023
Tax Court Rules on Self-Employment Tax Exemption for Limited Partners in a State Law LP: In a recent ruling, the Tax Court ruled that a limited partner in a state law limited partnership must satisfy a functional analysis test to qualify for the limited partner exemption from self-employment (SE) tax. This was the first time this issue has been addressed by the Tax Court. In Soroban Capital Partners LP v. Commissioner (Soroban), the partnership made guaranteed payments to its limited partners. Soroban included the guaranteed payments in the limited partners’ SE income, but not their shares of partnership ordinary income. The IRS determined that the limited partners’ SE income should also include their shares of partnership ordinary income, saying that the limited partner exemption from SE tax did not apply to them simply because they were limited partners in name only. Instead, the Court found that it was necessary to examine the limited partners’ functions and roles to determine whether they qualify for the limited partner exemption from SE tax. Soroban Capital Partners LP, 161 TC No. 12 (Tax Ct.).
Item for Monday, December 11, 2023
IRS Releases Guide on Improving Taxpayer Service: The IRS’ Independent Office of Appeals (Appeals) released its Focus Guide for fiscal year 2024. The guide highlights where Appeals will be improving taxpayer service in its mission to resolve tax disputes in a fair and impartial manner without the need for litigation. The Appeals’ Focus Guide aligns with the objectives of the IRS Strategic Operating Plan and outlines the service initiatives taxpayers can expect over the coming year, including: 1) promoting digital platforms to improve taxpayer communications with Appeals; 2) promoting paperless processes and other modernization efforts; 3) helping taxpayers achieve tax certainty earlier in the dispute resolution process; 4) expanding access to in-person conferences and promoting video conferences to taxpayers who cannot attend in person; and 5) collaborating with the taxpayer practitioner community on continuing education for the Appeals workforce. The Focus Guide can be found at https://www.irs.gov/pub/irs-pdf/p6511.pdf . News Release IR 2023-233 .
Item for Friday, December 8, 2023
IRS Sends Notices of Disallowed ERC Claims: The IRS is sending an initial round of more than 20,000 letters to taxpayers notifying them of disallowed employee retention credit (ERC) claims. To prevent improper ERC payments from being made to ineligible entities, the IRS is disallowing claims made by entities that did not exist or did not have paid employees during the period of eligibility. The mailings are part of an expanded compliance effort that includes a special withdrawal program for those with pending claims who have since realized they may have filed an inaccurate tax return. A separate voluntary disclosure program will be unveiled later this month allowing those who received questionable payments to come forward and avoid future IRS action. Taxpayers who are ineligible for the credit will begin receiving copies of Letter 105 C (Claim Disallowed), beginning this week. News Release IR 2023-230.
