Regulations

On September 19, 2025, the IRS published proposed regulations to implement and provide guidance regarding new Section 224, enacted as part of the One Big Beautiful Bill Act (P.L. 119-21).  The proposed regulations define qualifying payment methods, jobs that customarily receive tips, and exclusions from the deduction.

Section 224 would allow single filers who earn up to $150,000 annually or married couples who earn up to $300,000, to deduct up to $25,000 in qualified tips received during the tax year in an occupation that customarily and regularly received tips on or before December 31, 2024.  The deduction phases out for taxpayers with modified adjusted gross income over $150,000, and over $300,000 for joint filers.  The proposed regulations clarify that the maximum deduction is reduced (but now below zero) by $100 for each $1,000 by which the taxpayer’s modified adjusted gross income exceeds the $150,000 (or $300,000) limit.  To be deductible, tips must be included on reporting statements, such as the Form W-2 or Form 1099.  No deduction is allowed under section 224 for any year beginning after December 31, 2028.Continue Reading No Tax on “Qualified” Tips:  IRS Issues Proposed Regulations on Tipped Income Deduction

On January 16, 2025, the IRS published proposed regulations to implement and provide guidance regarding amendments made to section 162(m) as part of the American Rescue Plan Act of 2021 (ARPA).  These proposed regulations expand the compensation deduction limitation for publicly held corporations under I.R.C. section 162(m), beginning in 2027.…

Continue Reading IRS Issues Proposed Regulations to Expand Limitation on Compensation Deduction for Publicly Held Corporations

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

[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