Newsletters
Tax Alerts
February 26, 2021
Tax Briefing(s)

The IRS has issued guidance clarifying that taxpayers receiving loans under the Paycheck Protection Program (PPP) may deduct their business expenses, even if their PPP loans are forgiven. The IRS previously issued Notice 2020-32 and Rev. Rul. 2020-27, which stated that taxpayers who received PPP loans and had those loans forgiven would not be able to claim business deductions for their otherwise deductible business expenses.


The IRS has waived the requirement to file Form 1099 series information returns or furnish payee statements for certain COVID-related relief that is excluded from gross income.


Due to the COVID-19 pandemic, certain employers and employees who use the automobile lease valuation rule to determine the value of an employee’s personal use of an employer-provided automobile may switch to the vehicle cents-per-mile method.


Estimated tax underpayment penalties under Code Sec. 6654 are waived for certain excess business loss-related payments for tax years beginning in 2019. The relief is available to individuals, as well as trusts and estates that are treated as individuals for estimated tax payment penalty purposes.


The IRS has extended the time period during which employers must withhold and pay the employee portion of Social Security tax that employers elected to defer on wages paid from September 1, 2020, through December 31, 2020.


The IRS has issued guidance that provides partnerships with relief from certain penalties for the inclusion of incorrect information in reporting their partners’ beginning capital account balances on the 2020 Schedules K-1 (Forms 1065 and 8865). The IRS has also provided relief from accuracy-related penalties for any tax year for the portion of an imputed underpayment attributable to the inclusion of incorrect information in a partner’s beginning capital account balance reported by a partnership for the 2020 tax year.


Final regulations provide guidance related to the limitation on the deduction for employee compensation in excess of $1 million.


The IRS has issued final regulations providing additional guidance on the limitation on the deduction for business interest under Code Sec. 163(j). The regulations finalize various portions of the proposed regulations issued in 2020 with few modifications. They address the application of the limit in the context of calculating adjusted taxable income (ATI) with respect to depreciation, amortization, and depletion. The regulations also finalize rules on the definitions of real property development and redevelopment, as well as application to passthrough entities, regulated investment companies (RICs), and controlled foreign corporations.


The IRS has released final regulations that address the changes made to Code Sec. 162(f) by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97), concerning the deduction of certain fines, penalties, and other amounts. The final regulations also provide guidance relating to the information reporting requirements for fines and penalties under Code Sec. 6050X.


The IRS has provided a safe harbor allowing a trade or business that manages or operates a qualified residential living facility to be treated as a "real property trade or business" solely for purposes of qualifying to make the Code Sec. 163(j)(7)(B) election. This guidance formalizes the proposed safe harbor issued in Notice 2020-59, I.R.B. 2020-34, 782. Taxpayers may apply the rules to tax years beginning after December 31, 2017.


The IRS has released final regulations addressing the post-2017 simplified accounting rules for small businesses. The final regulations adopt and modify proposed regulations released in August 2020.


During the presidential campaign, then candidate Barack Obama promised to close international tax loopholes and crack down on offshore tax evasion. In May, President Obama unveiled sweeping measures to reform the nation's international tax rules. The president also proposed to overhaul the rules for holding funds in offshore accounts, repeal the last-in, first-out (LIFO) accounting rules, tax carried interest as ordinary income, and provide limited business tax relief. Details of the president's proposals were released by the Treasury Department in the "Green Book" (named for the color of its cover).

Just over 100 days into his administration, President Barack Obama is releasing more details about his tax policies. The Treasury Department's recently published "Green Book" (which is called green for the color of its cover) describes the president's tax proposals. As expected, many of the proposals build on the president's campaign promises to cut taxes for middle-income individuals. Congress has already begun drafting legislation and debating the president's proposals, which could be enacted into law later this year.

Non-itemizers and itemizers alike who purchase a new vehicle in 2009 may be eligible for a new (but temporary) above-the-line deduction for the state and local sales taxes or excise taxes paid on the purchase. This temporary tax break is part of the American Recovery and Reinvestment Tax Act of 2009 (2009 Recovery Act).

Move over hybrids - buyers of Volkswagen and Mercedes diesel vehicles now qualify for the valuable alternative motor vehicle tax credit. Previously, the credit had gone only to hybrid vehicles. Now, the IRS has qualified certain VW and Mercedes diesels as "clean" as a hybrid.

Education continues to become increasingly expensive. The Tax Code provides a variety of significant tax breaks to help pay for the rising costs of education, from elementary and secondary school to college. Some people are surprised at what is available these days, as the dust settles on tax rules that have been in transition now for a number of years. A good place to start educating yourself on these education-related tax incentives - to help yourself or a member of your family better tackle the rising expense of education - is right here.


The flagging state of the economy has left many individuals and families to cope with rising gas prices and food costs, struggle with their mortgage and rent payments, and manage credit card debt and other common monthly bills. Whether individuals are contemplating how to pay off their credit card or obtain a mortgage amid the "credit crunch" and "economic downturn," many people may be considering alternative sources of financing to reach their goals, including the tapping of a retirement account.

Often, individuals end up with an unexpected tax liability on April 15. There are several options available to pay off your tax debt, stop accruing penalties and interest and secure peace of mind. Each payment method has its advantages and disadvantages depending on your financial, and personal, circumstances, and each option should be discussed with a tax professional prior to making a decision. Our office would be glad to answer any questions you have about each payment method.

If you've made, or are planning to make, a big gift before the end of 2009, you may be wondering what your gift tax liability, if any, may be. You may have to file a federal tax return even if you do not owe any gift tax. Read on to learn more about when to file a federal gift tax return.

Falling interest rates and the current slowdown in the U.S. economy are having a widespread affect on today's economy and individuals' financial resources, from savings accounts to personal loans and credit card debt. The drop in interest rates that has occurred over the course of the last few months has also produced strategic tax planning opportunities for individuals contemplating certain types of asset transfers.