Small Business Taxes & Management

Special Report


Priority Guidance Plan 2014-2015

 

Small Business Taxes & ManagementTM--Copyright 2014, A/N Group, Inc.

 

The IRS recently announced its Priority Guidance Plan for 2014-2015. The plan consists of a number of issues the IRS intends to provide guidance on either through regulations, revenue procedures, revenue rulings, or notices. The plan also provides a list of the regular guidance that appears annually or monthly such as the inflation adjustment amounts for tax brackets and the applicable federal rate. You can find the complete plan at www.irs.gov/pub/irs-utl/2014-2015_pgp_initial.pdf. It runs to 34 pages. Below we've reproduced some of the proposed guidance that is of interest to CPAs and other tax professionals and small business owners and individuals.

Some of the more topics of particular interest include:

 

Corporations and Shareholders

Regulations under Secs. 301, 302, and 358 regarding the recovery and allocation of basis in redemptions, organizations, and reorganizations. Proposed regulations were published on January 21, 2009.

Guidance under Secs. 332, 351, and 368 regarding transactions involving the transfer or receipt of no net equity value. Proposed regulations were published on March 10, 2005.

Guidance regarding when a transfer by a person to a corporation and a transfer by that corporation to that person, ostensibly in two separate transactions, should be respected as two separate transactions for Federal income tax purposes.

Guidance regarding whether a corporation is a controlled corporation within the meaning of Sec.355 if, in anticipation of the distribution of its stock, the distributing corporation acquires or retains putative control of the controlled corporation through the use of classes of shares having different voting powers.

Guidance regarding the application of Secs. 355 and 361 to a distributing corporation's use of its controlled corporation’s stock or securities to retire its putative debt issued in anticipation of the distribution of the stock of the controlled corporation.

Regulations relating to the active trade or business requirement under Sec.355(b). Proposed regulations were published on May 7, 2008.

 

Employee Benefits

Regulations updating the rules applicable to ESOPs.

Revenue ruling relating to the recovery of basis under phased retirement program.

Regulations on exceptions to additional tax under Sec. 72(t) on early distributions from retirement plans and IRAs.

Guidance regarding substantiation of hardship distributions.

Guidance regarding Qualified Nonelective Contributions (QNECs) and Qualified Matching Contributions (QMACs).

Guidance under Secs. 401(k)(12) and (13)

Guidance under Secs. 401(k)(12) and (13) on safe harbor Sec.401(k) plans regarding certain mid-year changes and certain business transactions.

Guidance under Sec. 404 on deductions for employer contributions to qualified plans.

Guidance on rules applicable to IRAs under Secs. 408 and 408A.

Guidance updating regulations for service credit and vesting under Sec.411.

Guidance regarding the aggregation rules under Sec. 414(m).

Final regulations on determination of minimum required contributions under Sec. 430. Proposed regulations were published on April 15, 2008.

Regulations relating to the reporting requirements under Sec. 6057. Proposed regulations were published on June 21, 2012.

Final regulations under Secs.6057, 6058, and 6059 regarding electronic filing of Form 5500. Proposed regulations were published on August 30, 2013.

Revenue Procedure amending Revenue Procedure 2013-12 relating to Employee Plans Compliance Resolution System (EPCRS) to provide guidance with regard to certain corrections.

Guidance providing clarification regarding the Voluntary Closing Program for failures not covered by EPCRS.

Guidance regarding election procedures under Sec. 83(b).

Regulations under Sec. 86 regarding rules for lump-sum elections.

Guidance under Secs.119 and 132 regarding employer-provided meals.

Regulations on cafeteria plans under Sec. 125.

Guidance under Sec. 132(f) on the use of electronic forms of fare media to distribute qualified transportation fringe benefits. A request for comments was published in Notice 2012-38, 2012-24 IRB.

Final regulations under Sec. 162(m) on the stock-based compensation aggregate limit rule under Treas. Reg. Sec. 1.162-27(e)(2) and the transition relief under Treas. Reg. Sec. 1.162-27(f)(1). Proposed regulations were published on June 24, 2011.

Final regulations under Sec. 162(m)(6) as added by Sec. 9014 of the Patient Protection and Affordable Care Act.

Guidance under Secs.280G and 4999(a) on change in ownership.

Regulations under Sec. 404 on application of the "in which or with which ends" rule and the exceptions to that rule in Sec. 1.404(a)-12(b).

Final regulations on income inclusion under Sec. 409A. Proposed regulations were published on December 8, 2008.

Guidance to update prior Sec. 409A correction program guidance.

Revenue Ruling under Sec. 419A on the definition of post-retirement medical benefits.

Guidance on the application of Sec. 1402(a)(13) to limited liability companies.

Guidance updating the reporting requirements for sick pay benefits.

Regulations under Sec. 4980G on the interaction of Sec. 4980G and Sec. 125 with respect to comparable employer contributions to employees’ HSAs.

Notice under Sec. 4980I on the excise tax on high cost employer-provided coverage as added by Sec. 9001 of the ACA.

Guidance under Sec. 6053 regarding tips.

 

Excise Tax

Regulations under Secs.4051 and 4071 on heavy trucks, tractors, trailers, and tires.

 

General Tax Issues

Guidance relating to United States v. Windsor (determining that Section 3 of the Defense of Marriage Act is unconstitutional).

Regulations under Sec. 36B, as added by Sec. 1401 of the ACA, regarding minimum value of eligible employer-sponsored coverage and other provisions relating to the health insurance premium tax credit. Proposed regulations were published on May 3, 2013.

Regulations under Sec. 41 on the exception from the definition of “qualified research” for internal use software under Sec. 41(d)(4)(E).

Regulations under Sec. 41 on whether the gross receipts component of the research credit computation for a controlled group under Sec. 41(f) includes gross receipts from transactions between group members. Proposed regulations were published on December 13, 2013.

Final regulations regarding the election of the alternative simplified credit under Sec. 41(c)(5). Temporary regulations were published on June 3, 2014.

Regulations on the allocation of the research credit to corporations and trades or businesses under common control for purposes of Sec. 41(f)(1).

Temporary regulations concerning renewable energy and maximum gross rent under Sec. 42.

Guidance under Sec. 42 relating to the application of the design and construction accessibility requirements under the Fair Housing Act.

Final regulations under Sec. 45D that revise and clarify certain rules relating to recapture of the new markets tax credit as well as other issues. Proposed regulations were published August 11, 2008.

Final regulations under Sec. 45D that revise and clarify certain rules relating to recapture of the new markets tax credit as well as other issues. Proposed regulations were published August 11, 2008.

Guidance on the energy credit under Sec. 48.

Guidance concerning the interaction of the rules in Sec. 50(d)(5) and subchapter K.

Guidance under Secs.61(a)(12) and 1001 regarding whether a recourse purchase money home mortgage loan is treated as a nonrecourse loan from inception if, under a state anti-deficiency statute, the lender cannot pursue the homeowner for the difference between the amount of the loan and the amount realized on a foreclosure or short sale of the home.

Revenue Ruling under Sec. 108 regarding the application of the qualified real property business indebtedness exclusion for real estate developers.

Final regulations under Secs.108 and 7701 concerning the bankruptcy and insolvency rules and disregarded entities. Proposed regulations were published on April 13, 2011.

Regulations under Sec. 152 regarding the definition of dependent.

Final regulations under Secs.162 and 262 regarding the deductibility of expenses for lodging not incurred in traveling away from home. Proposed regulations were published on April 25, 2012.

Guidance under Sec. 165 on determining wagering gains and losses.

Guidance under Sec. 165 on worthless stock losses.

Final regulations under Sec. 170 regarding charitable contributions. Proposed regulations were published on August 7, 2008.

Regulations under Sec. 170(f)(8) regarding donee substantiation of charitable contributions.

Regulations under Sec. 199 including amendments by the Tax Extenders and Alternative Minimum Relief Act of 2008.

Regulations under Sec. 199 relating to computer software.

Regulations under Sec. 213 regarding medical and dental expenses.

Regulations on delay rentals under Secs.263A and 612.

Regulations under Sec. 280A regarding deductions for expenses attributable to the business use of homes and rental of vacation homes.

Guidance clarifying whether the business use of an aircraft by a lessee that is a five percent owner or related party of the lessor of the aircraft is qualified business use for purposes of Sec. 280F.

Guidance regarding material participation by trusts and estates for purposes of Sec. 469.

Regulations under Sec. 1012 regarding basis rules for stock and debt.

Guidance updating existing regulations regarding basis to include references to Sec. 1022 as appropriate.

Final regulations under Sec. 5000A concerning minimum essential coverage and other rules regarding the shared responsibility payment for individuals.

Final regulations under Sec. 1411, as added by Sec. 1402 of the Health Care and Education Reconciliation Act, regarding issues related to the net investment income tax. Proposed regulations were published on December 2, 2013.

 

Gifts, Estates and Trusts

Final regulations under Sec. 1014 regarding uniform basis of charitable remainder trusts. Proposed regulations were published on January 17, 2014.

Revenue Procedure under Sec. 2010(c) regarding the validity of a QTIP election on an estate tax return filed only to elect portability.

Final regulations under Secs.2010 and 2505 regarding portability of the deceased spousal unused exclusion. Proposed and temporary regulations were published on June 18, 2012.

Final regulations under Sec. 2032(a) regarding imposition of restrictions on estate assets during the six month alternate valuation period. Proposed regulations were published on November 18, 2011.

Guidance under Sec. 2053 regarding personal guarantees and the application of present value concepts in determining the deductible amount of expenses and claims against the estate.

Regulations under Sec. 2642 regarding available GST exemption and the allocation of GST exemption to a pour-over trust at the end of an ETIP.

Final regulations under Sec. 2642(g) regarding extensions of time to make allocations of the generation-skipping transfer tax exemption. Proposed regulations were published on April 17, 2008.

Regulations under Sec. 2704 regarding restrictions on the liquidation of an interest in certain corporations and partnerships.

Guidance under Sec. 2801 regarding the tax imposed on U.S. citizens and residents who receive gifts or bequests from certain expatriates.

 

Insurance Companies and Products

Final regulations under Sec. 72 on the exchange of property for an annuity contract. Proposed regulations were published on October 18, 2006.

Guidance on annuity contracts with a long-term care insurance rider under Secs.72 and 7702B.

Guidance on exchanges under Sec. 1035 of annuities for long-term care insurance contracts.

Regulations under Sec. 7702 defining cash surrender value.

 

Partnerships

Regulations under Sec. 108(e)(7).

Regulations under Sec. 1.337(d)-3 relating to partnership transactions involving a corporate partner’s stock or other equity interests.

Final regulations under Sec. 469(h)(2) concerning limited partners and material participation. Proposed regulations were published on November 28, 2011.

Regulations on forward and reverse allocations under Sec. 704(c).

Regulations to update the securities partnership aggregation rules under Sec. 704(c).

Guidance under Secs.704, 707, and 721 on management fee waivers.

Final regulations under Secs.704, 734, 743, and 755 arising from the American Jobs Creation Act of 2004, P.L. 108-357, 118 Stat. 1418, regarding the disallowance of certain partnership loss transfers and no reduction of basis in stock held by a partnership in a corporate partner. Proposed regulations were published on January 16, 2014.

Final regulations under Sec. 706(d) regarding the determination of a distributive share when a partner's interest changes. Proposed regulations were published on April 14, 2009.

Regulations under Sec. 706(d) regarding the determination of a distributive share of any allocable cash basis items and certain other items when a partner's interest changes.

Regulations under Sec. 707 relating to disguised sales of property. Proposed regulations were published on January 30, 2014.

Guidance addressing late short tax year returns following technical terminations under section 708.

Guidance relating to Sec. 743(b) and contingent liabilities.

Regulations under Sec. 751(b) on unrealized receivables and inventory.

Final regulations under Sec. 752 regarding related person rules. Proposed regulations were published on December 16, 2013.

Final regulations under Secs.761 and 1234 on the tax treatment of noncompensatory partnership options. Proposed regulations were published on February 5, 2013.

Guidance under Sec. 7704(d)(1)(E) regarding qualifying income for publicly traded partnerships.

 

S Corporations

Guidance regarding worthless stock deductions under Sec. 165(g) for S corporations.

Guidance under Sec. 1366.

Guidance under Sec. 1367 regarding basis ordering rules of certain suspended losses.

 

Tax Accounting

Guidance under Secs.167 and 1031 regarding whether property held simultaneously for sale and for lease (also known as “dual-use property”) is eligible for depreciation deductions and/or like-kind exchange treatment.

Final regulations under Sec. 168 regarding the disposition of tangible depreciable property. Proposed regulations were published on September 19, 2013.

Final regulations under Sec. 263A regarding the inclusion of negative amounts in additional Sec. 263A costs. Proposed regulations were published on September 5, 2012.

Revenue Procedure under Sec. 263(a) regarding the capitalization of certain retail store expenditures.

Regulations under Sec. 267 regarding the application of Sec. 1.267(b)-1(b) to partners and partnerships.

Revenue Procedure under Sec. 446 updating Rev. Proc. 97-27 and Rev. Proc. 2011-14 providing procedures and rules for automatic and non-automatic changes in method of accounting.

Regulations under Sec. 451 regarding advance payments received for goods and services, including amounts received in exchange for the sale or issuance of gift cards, trading stamps, and loyalty points that can be redeemed for goods or services.

Regulations under Sec. 453 addressing certain annuity contracts received in exchange for property.

Regulations under Sec. 453A regarding contingent payment sales.

Guidance under Sec. 453B regarding nonrecognition of gain or loss on the disposition installment obligations.

Regulations under Sec. 460 regarding home construction contracts and rules for certain changes in method of accounting for long-term contracts.

Revenue ruling under Sec. 461 on economic performance for liabilities created under multi-year service contracts.

Final regulations amending Sec. 1.471-8 regarding the treatment of vendor allowances under the retail inventory method. Proposed regulations were published on October 7, 2011.

Regulations under Sec. 472 regarding dollar-value last-in, first-out (LIFO) inventories, including rules for combining pools as a result of a change in method of accounting, certain corporate acquisitions, and certain nonrecognition transactions.

Regulations amending Sec. 1.472-8 regarding the inventory price index computation (IPIC) method.

Guidance regarding the treatment of deferred revenue in taxable asset sales and acquisitions.

 

Tax Administration

Guidance under Sec. 6015 regarding relief from joint and several liability. Proposed regulations were published August 13, 2013.

Guidance under Sec. 6041 relating to Forms W-2G.

Guidance under Sec. 6050P regarding the 36-month rule for reporting cancellation of indebtedness when a financial institution is continuing to pursue collection actions.

Procedural guidance for TEFRA partnerships.

Final regulations under Sec. 6501(c)(10) regarding the extension of the statute of limitations for assessment relating to failures to report required information concerning listed transactions, necessitated by Sec. 814 of the American Jobs Creation Act of 2004. Proposed regulations were published on October 7, 2009.

Guidance under Sec. 6621(d) with regard to interest netting.

Regulations under Secs.6662, 6662A, and 6664 regarding accuracy-related penalties relating to understatements. Interim guidance was issued as Notice 2005-12.

Regulations under Sec. 6695A, as added by Sec. 1219 of the Pension Protection Act of 2006, regarding the penalty applicable to appraisers.

Regulations under Sec. 6707A, as amended by Sec. 2041(a) of the Small Business Jobs Act of 2010, regarding the penalty for failure to disclose reportable transactions.

Guidance under Secs.7701(o) and 6662(b)(6) regarding codification of the economic substance doctrine by Sec. 1409 of the Health Care and Education Reconciliation Act of 2010. Prior guidance was issued as Notice 2010-62.

Update to Revenue Ruling 90-5 dealing with Saturday, Sunday and holiday rules for filing.

Guidance prescribing the electronic signature requirements for tax returns and other documents submitted to the IRS.

 


Copyright 2014 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles in this publication are not intended to be used, and cannot be used, for the purpose of avoiding accuracy-related penalties that may be imposed on a taxpayer. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536


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--Last Update 09/23/14