The IRS has issued proposed regulations that would provide guidance on the application of the new excise tax on repurchases of corporate stock made after December 31, 2022 (NPRM REG-115710-22). Another set of proposed rules would provide guidance on the procedure and administration for the excise tax (NPRM REG-118499-23). Code Sec. 4501 and IRS Guidance Beginning in 2023, Code Sec. 4501 subjects a covered corporation to an excise tax equal to one percent of the fair ..read more

The IRS has provided a limited waiver of the addition to tax under Code Sec. 6655 for underpayments of estimated income tax related to application of the corporate alternative minimum tax (CAMT), as amended by the Inflation Reduction Act (P.L. 117-169). The Inflation Reduction Act added a new corporate AMT under Code Sec. 55, beginning after December 31, 2022, based on a corporation‘s adjusted financial statement income. Code Sec. 6655 generally requires corporations to pay e ..read more

For purposes of the energy investment credit, the IRS released 2024 application and allocation procedures for the environmental justice solar and wind capacity limitation under the low-income communities bonus credit program. Many of the procedures reiterate the rules in Reg. §1.48(e)-1 and Rev. Proc. 2023-27, but some special rules are also provided. The guidance superseded Rev. Proc. 2023-27 for the 2024 program year only. Submitting an Application The IRS will publicly announce the opening an ..read more

The Tax Court has ruled against the IRS’s denial of a conservation easement deduction by declaring a Treasury regulation to be invalid under the enactment requirements of the Administrative Procedure Act (APA). An LLC conveyed a conservation easement of land to a foundation that was properly registered with the county clerk. The deed conveyed the easement in perpetuity, allowing for extinguishment only in cases where the conservation purposes became impossible to accomplish or if the property were to be condemned by the local gov ..read more

The IRS announced that final regulations related to required minimum distributions (RMDs) under Code Sec. 401(a)(9) will apply no earlier than the 2025 distribution calendar year. In addition, the IRS has provided transition relief for 2024 for certain distributions made to designated beneficiaries under the 10-year rule. The transition relief extends similar relief granted in 2021, 2022, and 2023. SECURE Act Changes The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act ..read more

The IRS, in connection with other agencies, have issued final rules amending the definition of “short term, limited duration insurance“ (STLDI), and adding a notice requirement to fixed indemnity excepted benefits coverage, in an effort to better distinguish the two from comprehensive coverage. Comprehensive coverage is health insurance which is subject to certain federal consumer protections. Both STLDI and fixed indemnity excepted benefits coverage generally provide limited benefits at lower premiums than comprehensive coverage, and enrollment is ..read more

Taxpayers received about $659 million in refunds during fiscal year 2023, representing a 2.7 percent increase in the amount of refunded to taxpayers in the previous fiscal year. The refunds were on nearly $4.7 trillion in gross revenues collected by the Internal Revenue Service, which represents about 96 percent of the funding that supports federal government operations, the agency reported in its annual Data Book for fiscal year 2023, which was released April 18, 2024. This is down from more than $4.9 trillion in gross tax revenues in&nbs ..read more

The IRS has provided a limited waiver of the addition to tax under Code Sec. 6655 for underpayments of estimated income tax related to application of the corporate alternative minimum tax (CAMT), as amended by the Inflation Reduction Act (P.L. 117-169). The Inflation Reduction Act added a new corporate AMT under Code Sec. 55, beginning after December 31, 2022, based on a corporation‘s adjusted financial statement income. Code Sec. 6655 generally requires corporations to pay e ..read more

Gross receipts from the sale of Alaska automobile dealerships were properly excluded from a taxpayer’s sales factor for California corporate tax purposes. The receipts were excludable as receipts arising from a substantial and occasional sale. The taxpayer reported the gain on the sale as business income and used a single-sales factor formula to apportion the income. It included the gross receipts from the sale in the denominator, but not the numerator, of its sales factor. Under a California regulation, substantial amounts of gross receipts from an occasional sale of assets held for use in th ..read more

The IRS has issued proposed regulations that would provide guidance on the application of the new excise tax on repurchases of corporate stock made after December 31, 2022 (NPRM REG-115710-22). Another set of proposed rules would provide guidance on the procedure and administration for the excise tax (NPRM REG-118499-23). Code Sec. 4501 and IRS Guidance Beginning in 2023, Code Sec. 4501 subjects a covered corporation to an excise tax equal to one percent of the fair ..read more