Information Reporting

Signed into law by President Trump on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) (H.R. 1) adds section 6050AA to the Internal Revenue Code to adopt new information reporting requirement requiring businesses receiving interest on car loans from individuals to report specified information to the IRS (presumably on a new form in the 1098 series) and to provide a written statement to the payers.  The requirement is similar to those under section 6050H for businesses receiving payments of mortgage interest.  The requirement was adopted in conjunction with a new tax deduction for up to $10,000 in interest paid on loans used for the purchase of passenger vehicles assembled in the United States.  (The deduction is subject to a phaseout for individuals with adjusted gross incomes above $100,000 ($200,000 for married filing jointly.)Continue Reading Auto Loan Interest Deduction Comes with New Information Reporting Requirement for Lenders

The House of Representatives continues work on a reconciliation bill that would enact significant tax provisions and spending cuts.  The various legislative committees have completed work on the areas of the bill within their jurisdiction, including the Ways and Means Committee, which proposed language that would enact $3.8 trillion in tax cuts over the next ten years.  Over the weekend, the House Budget Committee consolidated the legislation, and the House Bill is now before the Rules Committee, where a managers’ amendment may be considered before it heads to the House floor.  This article is one of a series of articles discussing various proposals in the legislation that touch on tax withholding, reporting, and fringe benefits.

The House Bill proposes to increase the thresholds under current law for information returns required under sections 6041 and section 6050W, as described in more detail below, as well as to modify section 3406 (requiring backup withholding) to align with this proposed change.  Continue Reading House Reconciliation Bill Would Increase Thresholds for Reporting Obligations under Sections 6041 and 6050W

On February 21, 2025, the IRS issued Notice 2025-15, which provides guidance regarding the alternative manner of furnishing certain health insurance coverage statements to individuals under I.R.C. sections 6055(c)(3) and 6056(c)(3).  President Biden signed the Paperwork Burden Reduction Act (H.R. 3797) in December 2024, eliminating the requirement to automatically…

Continue Reading IRS Issues Guidance Easing ACA Reporting Requirements

The IRS issued Rev. Rul. 2025-4 on January 15, 2025, regarding the federal income and employment tax treatment and related reporting requirements of contributions to, and benefits paid under, a mandatory state paid family and medical leave (PFML) program. The ruling includes various tax treatment scenarios containing the IRS’ guidance with…

Continue Reading IRS Issues Ruling on Tax Treatment of Contributions and Benefits Under State Paid Family and Medical Leave Programs

On October 18, 2024, the IRS issued final regulations on withholding for qualified retirement plan payments made to United States taxpayers living outside of the country.  The final regulations come five years after the IRS issued proposed regulations on the topic and almost four decades after the IRS issued Notice…

Continue Reading IRS Issues Final Regulations Governing Withholding on Certain Retirement Plan and Commercial Annuity Distributions Made to U.S. Taxpayers Abroad

This afternoon, in Announcement 2023-2, the IRS announced that brokers are not required to report additional information with respect to dispositions of digital assets until the IRS and Treasury issue final regulations under sections 6045 and 6045A.  The Infrastructure Investment and Jobs Act of 2021 (the “Act”) amended sections 6045 and 6045A to clarify and expand the rules regarding the reporting of information on digital assets by brokers.  These provisions of the Act were intended to increase tax compliance through additional information reporting regarding transactions involving digital assets.Continue Reading IRS Delays Gross Proceeds Reporting, Basis Reporting, and Transfer Statements between Brokers on the Disposition or Transfer of Digital Assets until Final Regulations are Issued

Today, in Notice 2023-10, the IRS announced a delay in the new reduced reporting threshold for section 6050W applicable to third-party settlement organizations (TPSOs).  Section 9674(a) of the American Rescue Plan Act of 2021 amended section 6050W(e) to provide that, for returns for calendar years beginning after December 31, 2021, a TPSO is required to report payments in settlement of third party network transactions with respect to any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the aggregate number of such transactions.  Prior to the change, the threshold was $20,000 and 200 transactions. Continue Reading IRS Publishes Last Minute Reprieve for Implementation of New Form 1099-K Reporting Threshold

[This post was originally published as an Alert by Covington Financial Services.]

On September 29, 2022, the Financial Crimes Enforcement Network (“FinCEN”) issued the first of three final rules (the “Final Rule”) implementing the Corporate Transparency Act (“CTA”). This Final Rule, which largely adopts the provisions of FinCEN’s December 2021 Proposed Rule, addresses beneficial ownership reporting requirements. Subsequent rulemakings will address (i) access to and safeguards around information in the contemplated beneficial ownership information database and (ii) revisions to FinCEN’s existing customer due diligence (“CDD”) rule for financial institutions (which currently remains in place).Continue Reading FinCEN Releases Final Rule on Beneficial Ownership Disclosure Requirements: Seven Things To Know

Last week, the Treasury Department released the “Green Book,” formally known as the General Explanations of the Administration’s Revenue Proposals.  Among its proposals, the Green Book suggests the expansion of the requirement to collect Forms W-9 to additional payments.

Under current law, payors are required to backup withhold…
Continue Reading Administration Proposes W-9 Requirement for More Reportable Payments

[This post was originally published as an Alert by Covington Financial Services.]

On December 7, 2021, the Financial Crimes Enforcement Network (“FinCEN”) invited public comment on its proposed rule (the “Proposed Rule”) implementing the beneficial ownership disclosure requirements of the Corporate Transparency Act (“CTA” or “Act”). Comments…
Continue Reading FinCEN Releases Notice of Proposed Rulemaking on Beneficial Ownership Disclosure Requirements: Seven Things To Know