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Garrity Ruling is Latest in Growing Debate over Civil Penalties for FBAR Violations

The U.S. District Court for the District of Connecticut has joined a growing debate among lower courts regarding the appropriate civil penalty applicable to willful FBAR violations through its ruling in United States v. Garrity.  The FBAR statute, regulations, instructions, and related guidance require that taxpayers annually report to the Treasury Department any financial interest … Continue Reading

LB&I Establishes Correction Program for Compliance Failures under Chapters 3 and 4

On February 27, 2019, LB&I issued a memorandum (LB&I-04-02019-002) outlining a new program administred by the Foreign Payments Practice (“FPP”) that allows withholding agents to report and correct failures under Chapter 3 or 4.  The program and its procedures arose based upon the frequency with which taxpayers contact FPP regarding potential corrections for Chapter 3 … Continue Reading

IRS Issues Action on Decision in Jacobs v. Commissioner

On February 19, 2019, the IRS issued AOD 2019-01, 2019 IRB 569, acquiescing in the result only in the Tax Court’s decision in Jacobs v. Commissioner, 148 T.C. 24 (2017). (Earlier coverage, here.)  By virtue of the AOD on Jacobs, the IRS indicated its acceptance of the Tax Court’s holding and will follow Jacobs “only … Continue Reading

IRS Releases Withholding Guidance

Earlier today, the IRS released new percentage method withholding tables for 2018 implementing the changes to major withholding provisions following the enactment of tax reform legislation.  In the revised Notice 1036, the IRS provided new withholding tables utilizing the value of personal exemptions that would have existed in the absence of tax reform and the existing … Continue Reading

IRS Delays New Withholding Requirement for Dispositions of Publicly Traded Partnership Interests

In response to public comments, the IRS today issued Notice 2018-08 that delays indefinitely withholding under new Code section 1446(f) with respect to dispositions of certain publicly traded partnerships.  Section 13501 of the enacted tax reform bill added a new Code section 1446(f) to impose a 10% withholding requirement on the amount of gain treated as … Continue Reading

New CAAs on Exchange of CbC Reports Pushes Total to 20

The IRS has concluded competent authority arrangements (“CAAs”) for the exchange of country-by-country (“CbC”) reports with Australia and the United Kingdom.  The CAA with Australia was signed in Australia on July 14 and by the United States on August 1.  The CAA with the United Kingdom was signed on August 16.  The new arrangements bring … Continue Reading

Tax Court Expands Section 119 Exclusion in Boston Bruins Decision

In a much anticipated decision, the U.S. Tax Court ruled yesterday that “the business premises of the employer” can include an off-premises facility leased by the employer when its employees are on the road.  The decision in Jacobs v. Commissioner addressed whether the employer (in this case, the professional hockey team, the Boston Bruins) was … Continue Reading

Refusal to Allow Closing Agreements on FICA Timing May Lead to Challenge

In an IRS Chief Counsel Advice Memorandum released on January 13, the IRS concluded that it should not enter into closing agreements with employers who failed to subject amounts of nonqualified deferred compensation to FICA taxes under the special timing rule in Section 3121(v)(2)(A).  In the past, some employers have been able to obtain a … Continue Reading

IRS Provides Guidance on De Minimis Safe Harbor for Errors in Amounts on Information Returns

The IRS today released Notice 2017-09 providing guidance on the de minimis safe harbor for errors in amounts reported on information returns.  The safe harbor was added to Sections 6721 and 6722 by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). Under the statute, filers are not subject to penalties under either … Continue Reading

IRS Provides Guidance on Calculating Intentional Disregard Penalties for Paper Filings

Earlier this month, the IRS announced in interim guidance that it would amend Section 20.1.7 of the Internal Revenue Manual to provide a methodology for the calculation of intentional disregard penalties under Section 6721 for filers who fail to file information returns electronically when required.  In general, filers of more than 250 information returns are … Continue Reading

IRS Provides Guidance on ACA Reporting in Working Group Meeting

In its Affordable Care Act (ACA) Information Returns (AIR) Working Group Meeting on June 14, the IRS discussed several outstanding issues related to ACA reporting under Sections 6055 and 6056 of the Internal Revenue Code.  Section 6055 generally requires providers of minimum essential coverage to report health coverage.  Section 6056 generally requires applicable large employers … Continue Reading

Regulations Limiting Refunds and Credits for Chapter 3 and Chapter 4 Withholding Due Soon

John Sweeney, Branch 8 Chief in the IRS Office of Associate Chief Counsel International, said on June 2 that proposed and temporary regulations limiting refunds and credits claimed by nonresident alien individuals and foreign corporations for taxes withheld under Chapter 3 and Chapter 4 of the Code will be released soon.  According to Sweeney, who … Continue Reading

IRS Updates IDES Technical FAQs for FATCA

On May 27, the IRS updated the technical FAQs for the International Data Exchange Service (IDES) used by foreign financial institutions (FFIs) and other organizations to file information returns required by the Foreign Account Tax Compliance Act.  Among other changes, the IRS provided a work-around for direct-reporting non-financial foreign entities (direct reporting NFFEs) that must register … Continue Reading

IRS Modifies 2015 6050W Letter Ruling

The IRS released a modified private letter ruling superseding a ruling issued in late 2015 under Section 6050W.  That ruling had determined that the party requesting the ruling was a third-party settlement organization.  The new ruling does not change the conclusion, but removes one rationale upon which the earlier ruling had based its determination. In … Continue Reading
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