Welcome to the Federal Tax Update Podcast, hosted by Lynn Nichols. This is presented as a member benefit by the South Carolina Association of CPAs. It is produced to provide current information about developments in U.S. tax law, such as cases, ruling, IRS pronouncements and expert comments on hot topics.

Trending in this edition:

  • Incomplete gift trusts in IRS crosshairs (1:52 mark)
  • Excludable disability and/or death benefits (3:49 mark)
  • FAQ on emergency rental assistance payments (5:27 mark)
  • American Rescue Plan provisions affecting 2020 income tax returns (6:42 mark)
    • Individual Tax Rules in the Act
    • Unemployment Benefits Exclusion Rule (7:20 mark)
    • Business Tax Rules in the Act (8:55 mark)
    • Restaurant Revitalization Grants – a Summary (9:50 mark)
    • Returning Funds to the Treasury (12:41 mark)
  1. Incomplete Gift Trusts Hit IRS’s No-Rule List in Foreboding Move

A special type of trust structure that the IRS blessed in private letter rulings for decades may not be as safe as tax advisers thought now that the IRS has added it to its no-rule list. [Tax Notes Today; 3/22/2021, article by Jonathan Curry]

  1. Some Disability, Death Benefits Excludable From Income

The IRS ruled that payments to a surviving beneficiary of a deceased member of a city’s governmental plan that are a continuation of job-related disability payments or are service-connected death benefits are excluded from the beneficiary’s gross income but some excess benefits and benefits determined based on the member’s age or length of service are taxable under section 72. [LTR 202111009; 12/22/2020, rel. 3/19.2021]

  1. IRS Issues FAQ on Emergency Rental Assistance Payments

The IRS has released a list of frequently asked questions on when emergency rental assistance payments that are used to help pay rent, utilities, home energy expenses, and other related expenses may be excluded from income. [Emergency Rental Assistance Frequently Asked Questions; 3/25/2021]

  1. Items from the American Rescue Plan Act of 2021 that will affect 2020 tax reporting and return preparation

Missed last week’s Tax topic? Catch up with Lynn at his Tax Updates video playlist.

All commentary is brief, and you should not take a position on the items discussed until you thoroughly examine it with authoritative sources. The topics can be found discussed in further length at Tax Notes Today.

“I have relied on Tax Analysts® to provide reliable and timely analysis of Federal tax developments for over 30 years. The ‘headnotes’ you see here are from ‘Tax Notes Today,’ the preeminent source of accurate information and analysis of important developments and trends in Federal taxation,” Nichols says.

You can contact Lynn Nichols at lynnnicholscpa@outlook.com or 714.321.3387 and connect on LinkedIn.

A federal tax specialist for 50 years, Lynn Nichols provides tax consulting services to CPA firms on complex federal income tax issues, professional standards in tax practice and effective tax practice management.

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