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.

The commentary is brief, and you should not take a position on the items discussed until you thoroughly examine it with authoritative sources. All 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.

In this installment:

  1. Termination of S Corp Election Inadvertent

The IRS ruled that a company will be treated as continuing to be an S corporation from the date its subchapter S election was inadvertently terminated when a trust became an ineligible shareholder, provided some conditions are met. [LTR 202044003, 7/20/2020, rel. 10/20/2020]

  1. IRS Relief Initiative Gives Options to Struggling Taxpayers

The IRS, seeking to help taxpayers affected by the COVID-19 pandemic, has announced (IR-2020-248) the expansion of taxpayer options for making payments and alternatives to resolve balances owed. [IR-2020-248; 11/2/2020]

  1. IRS Calls on Eligible College Students to Register for EIP

The IRS has advised (IR-2020-250) that self-supporting college students who don’t need to file a tax return may still qualify for an economic impact payment but must register by November 21 to receive it. [IR-2020-250; 11/5/2020]

Nichols note: This has been discussed in fuller detail with instructions on the SCACPA blog. 

  1. Final Regs Provide Guidance on RMD Calculations

The IRS has issued final regulations (T.D. 9930) that provide guidance on the life expectancy and distribution period tables used to calculate required minimum distributions from qualified retirement plans, IRAs and annuities, and other tax-favored employer-provided retirement arrangements. [T.D. 9930; 11/5/2020]

  1. Official Final Bonus Depreciation Regs Provide Further Guidance

The IRS has issued the official version of final regulations (T.D. 9916) that provide guidance on the additional first-year depreciation deduction under section 168(k). [T.D. 9916; 11/5/2020][Proposed Bonus Depreciation Reg Provision Withdrawn

The IRS has withdrawn a provision of proposed regulations (REG-106808-19) issued in September 2019 under section 168(k) regarding the extent to which a partner is deemed to have a depreciable interest in property held by a partnership. [REG-106808-19; 11/5/2020]

  1. IRS Addresses Treatment of Distributions After Plan Termination

The IRS has issued guidance (Rev. Rul. 2020-23) providing that section 403(b) retirement plans funded through individual or group section 403(b)(7) custodial accounts can be terminated through the distribution of individual custodial accounts (ICAs) and no part of the custodial account is includable in gross income until amounts are paid. [Rev. Rul. 2020-23; 11/5/2020]

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. Check out his Tax Updates video playlist.

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