Nichols’ Tax Update Podcast, Issue 21-26

10 Topics this week:

  1. **** IRS Will Not Acquiesce in TriNetHolding on FICA Tip Credits In an action on decision the IRS has announced that it will not acquiesce in an Eleventh Circuit holding that an employment services company, rather than its clients, had “control of the payment of wages” and that the company was the statutory employer under section 3401(d) for purposes of a FICA tax refund suit. [ AOD 2021-03; 2021-24 IRB 1199, 6/14/2021]
  1. Christian Group Challenges IRS on Proposed Exemption Denial Group that encourages Christians to become involved in civic affairs is challenging IRS’s contention that it doesn’t merit tax-exempt status as a charitable organization. [Tax Notes Today, 6/22/2021, article by Fred Stokeld]
  1. Automated Powers of Attorney Promise Big Time Savings The IRS’s announcement that it will launch online tax professional accounts in July is a big win for practitioners, but as always with agency programs, implementation could be tricky, tax industry veterans say. [Tax Notes Today, 6/22/2021, article by William Hoffman]
  1. **** Employer Payment Letters Sent to Churches Are Routine Requests In generic legal advice, the IRS concluded that letters providing a preliminary calculation of the employer shared responsibility payment that are sent to applicable large church employers are considered routine requests for section 7611 purposes.[AM  2021-003, 6/8/2021, rel. 6/22/2021]
  1. IRS Revises Nonqualified Deferred Comp Audit Technique Guide The IRS has revised a prior audit technique guide for examining cases involving nonqualified deferred compensation plans; the guide focuses on the tax treatment of deferred amounts, deferrals and employment taxes, and timing rules for income tax and for FICA/FUTA taxes. [Publication 5528 (6/2021), 6/22/2021, 23 pages]
  1. Ownership Registry Brings Tax Enforcement Benefits and Risks Legislation requiring companies to report their beneficial owners to the Financial Crimes Enforcement Network could help the IRS find more tax criminals but risks creating more too, according to practitioners. [Tax Notes Today, 6/23/2021, article by Nathan Richman]

Enacting U.S. Corporate Transparency Act Was ‘Modest First Step’  The Corporate Transparency Act is “a modest first step” to bringing the United States closer to international transparency standards, an official said, and challenges remain  as an ambitious guidance timeline bears down on reg writers. [Tax Notes Today, 3/5/2021, article by Andrew Velarde]

  1. IRS Launches Online Tools for Managing Child Tax Credit Payments The IRS has announced (IR-2021-130) that it has launched two new online tools to help families manage and monitor the advance monthly payments of child tax credits under the American Rescue Plan. [IR-2021-130, 6/23/2021]
  1. **** Eleventh Circuit Affirms Denial of Easement Donation Deduction The Eleventh Circuit affirmed a Tax Court decision that upheld the IRS’s disallowance of a charitable contribution deduction for a conservation easement donation and the assessment of accuracy-related penalties, finding that the Tax Court did not err in holding that the deed didn’t meet the extinguishment proceeds requirement and the deed wasn’t saved by an override clause. [TOT Property Holdings LLC et al;  CA11, No. 20-11050, 6/23/2021] {{that meant NO deduction, but real hit to taxpayer was reduced valuation AND 40% penalty}}
  1. More Formal Process Aims to Address Concerns on IRS Use of FAQs  The IRS plans to make an announcement regarding its use of frequently asked questions to answer substantive tax questions and addressing access to prior versions of FAQs, according to acting Chief Counsel William M. Paul.  Tax Notes Today, 6/25/2021, article by Nathan Richman]
  1. Tax Court Determines Year of Bases Reduction, Discharge of Debt  The Tax Court, declining to impose accuracy-related penalties, held that an individual was required to reduce his bases in depreciable real properties in 2012, the year in which he sold the properties, and found that he did not receive a discharge of indebtedness from a bank regarding properties he sold in 2013. [Richard S. Hussey; 156 T.C. No. 12; 6/24/2021]

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”. . . in my opinion . . .  the preeminent source of accurate information and analysis of important developments and trends in Federal taxation.

(**** identifies interesting current issue not covered in Lynn’s recorded commentary due to complexity and time required for fair comment.)