Source: https://www.currentfederaltaxdevelopments.com/blog
Timestamp: 2019-04-20 05:02:36+00:00

Document:
The IRS has released revisions to the Employee Plans Compliance Resolution System (EPCRS) in Revenue Procedure 2019-19. The revisions are effective as of April 19, 2019.
EPCRS constitutes three separate programs that are used to correct problems in the operations or documents of qualified retirement plans and certain other retirement arrangements (such as SEPs). The program generally treats sponsors more favorably who come forward voluntarily to correct their problems, and the system is meant to encourage sponsors to voluntarily fix the plan as opposed to “hoping” the issue will never be noticed.
The IRS issued its second set of proposed regulations dealing with Opportunity Zone issues (REG-120186-18). Tax Analysts reported in Tax Notes Today that Treasury officials had indicated in a press briefing related to the release of these regulations that they expect these will constitute the entirety of the remaining regulations for Opportunity Zones, although they did not rule out a third set of proposed regulations if it seems necessary.
The IRS has moved to plug a potential loophole created when Congress changed the law in the Tax Cuts and Jobs Act (TCJA) to allow an electing small business trust (ESBT) to have a nonresident alien (NRA) potential current beneficiary (PCB). In proposed regulations REG-117062-18 the IRS provides that if such an NRA would be treated as the owner of trust corpus under the grantor trust rules for such a trust, the grantor will not be treated as the owner of the S corporation portion of the ESBT.
In the preamble to the proposed regulations, the IRS points out that the committee reports related to the TCJA had stated that allowing NRAs to be PCBs of ESBTs did not pose a risk that the S corporation income would not be subject to U.S. tax, since tax is imposed on the trust and not the beneficiary for S corporation income when shares are held by an ESBT.
While the IRS did not have time to prepare forms for 2018 returns to calculate the deduction under IRC §199A, on April 16, 2019, just in time for Easter, the IRS released a draft of Form 8995, Qualified Business Income Simplified Computation, and Form 8995-A, Qualified Business Income Deduction.
In Chief Counsel Advice 201912001 the IRS held that family members, who while not directly holding shares in an S corporation, are deemed to be 2% shareholders under the rules of §318 are allowed to claim the self-employed health insurance deduction under IRC §162(l) if they otherwise qualify.
Under IRC §1372, individuals holding 2% or more of the stock of an S corporation are treated as if they were partners for purposes of applying the employee fringe benefit income tax rules. IRC §1372(b) expands that definition of shareholders to include those who would be deemed to hold such shares by attribution under IRC §318.
The AICPA Tax Executive Committee has sent a letter to the IRS suggesting changes be made to the instructions for Form 461, Limitation on Business Losses. The form is used to compute the limitation on business losses that was added by IRC §461.
The IRS has announced there will be changes to the process to issue employer identification numbers beginning on May 13 in New Release IR 2019-58. The IRS indicated these change are meant to enhance security.
Generally, the responsible party is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. In cases where more than one person meets that definition, the entity may decide which individual should be the responsible party.
Another manufacturer has sold enough qualified electric vehicles to begin phasing out the tax credit for purchasing the manufacturer’s vehicles. In Notice 2019-22 the IRS announced that the credit for qualified plug-in electric vehicles sold by General Motors would be phased down beginning April 1, 2019.
Before April 1, 2019, the credit for the affected vehicles was $7,500. From April 1, 2019 through September 30, 2019, buyers of the qualifying General Motors vehicles will receive 50% of the otherwise allowable credit ($3,750). For the period from October 1, 2019 through March 31, 2020, buyer will receive 25% of the otherwise allowable credit ($1,875). No credit will be allowed for purchases of vehicles after April 1, 2020.
The IRS released proposed regulations on the rules added for reporting certain transatctions related to life insurance policies under IRC §6050Y and changes made to the transfer for value rules found at IRC §101(a)(3) in REG-103083-18. The provisions were added to the law by the Tax Cuts and Jobs Act (TCJA) in late 2017.

References: §199
 §318
 §162
 §1372
 §1372
 §318
 §461
 §6050
 §101