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About Melody Clark

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So far Melody Clark has created 299 blog entries.

October 2021

2021-2022 Special Per Diem Rates Released

The IRS has released the 2021-2022 special per diem rates. Taxpayers use the per diem rates to substantiate certain expenses incurred while traveling away from home. These special per diem rates include:

the special transportation industry meal and incidental expenses (M&IE) rates;the rate for the incidental expenses only deduction; andthe rates and list of high-cost localities for purposes of the high-low […]

Qualified Sick and Family Leave Wages Reporting Guidance Issued

The IRS and the Treasury Department have issued guidance to employers about reporting the amount of qualified sick and family leave wages paid to employees for leave taken in 2021 on Form W-2, Wage and Tax Statement. Further, the notice provides guidance under recent legislation, including: the Families First Coronavirus Response Act (FFCRA) ( P.L. 116-127), as amended by the COVID-Related Tax […]

Temporary, Proposed Regs Authorize Assessment of Erroneous Refund of COVID-19 Employment Tax Credits

The IRS has issued temporary and proposed regulations that authorize the assessment of any erroneous refund of the COVID-19 employment tax credits which were added by the American Rescue Plan Act of 2021 ( P.L. 117-2). These credits for certain wages paid by employers are:

the Credit for Paid Sick Leave under Code Sec. 3131,the Credit for Paid Family Leave under Code Sec. 3132, […]

Final Foreign Partner Withholding Regulations To Be Deferred Until 2023

The IRS has announced that it intends to defer until 2023 the applicability of certain final regulations under Code Sec. 1446(a) and (f) relating to withholding of tax on foreign partners’ share of effectively connected income.

Withholding Provisions on Transfers of Interests in Publicly Traded Partnerships DeferredThe amendments will defer the applicability date to January 1, 2023, for certain provisions relating to (1) withholding under Code […]

IRS Reminds Taxpayers to File and Pay 2020 Tax Returns by October 15 Due Date

The IRS has reminded taxpayers to file their 2020 tax returns by the upcoming October 15, 2021 due date. Taxpayers must file on or before the extension deadline to avoid the penalty for filing late if they request an extension. Tax returns can still be filed through electronic filing options, such as the IRS Free File.

However, the following taxpayers may […]

Taxpayers Urged to Develop Emergency Preparedness Plans for Surviving Natural Disasters

The IRS has reminded taxpayers to develop emergency preparedness plans due to the upcoming hurricane season and the ongoing threat of wildfires in some parts of the country. September is declared as the National Preparedness Month.

Further, the IRS advised taxpayers to:

secure critical documents such as tax returns, birth certificates, deeds, titles and insurance policies inside waterproof containers in a secure […]

IRS Reminder for Classification of Workers as Employees or Independent Contractors

The IRS has emphasized the importance of correctly determining whether the individuals providing services to businesses were employees or independent contractors. Generally, an employee performs services that businesses control. Independent contractors offer their services to the public. Businesses have a right to control the details of the services performed.

The classification depends on the:

company’s behavioral Control on what the worker does […]

Use of E-Signatures Approved for Certain Forms

The IRS has allowed taxpayers to use electronic or digital signatures on certain paper forms they cannot file electronically. The Service has balanced the e-signature option with critical security and protection needed against identity theft and fraud. The IRS will accept a wide range of electronic signatures. Acceptable electronic signature methods include:

a typed name typed on a signature block;a scanned […]

Tax Court Had Jurisdiction Over Innocent Spouse Case

The Tax Court had jurisdiction to determine the appropriate relief available to an individual who sought innocent spouse relief for two tax years at issue. Initially, the taxpayer submitted a request for innocent spouse relief for one tax year, which the IRS denied in a final determination. Subsequently, the taxpayer filed an untimely petition for Tax Court review which was […]

September 2021

2021 Luxury Auto Depreciation Caps and Lease Inclusion Amounts Issued

The IRS has issued the luxury car depreciation limits for business vehicles placed in service in 2021 and the lease inclusion amounts for business vehicles first leased in 2021.

Luxury Passenger Car Depreciation CapsThe luxury car depreciation caps for a passenger car placed in service in 2021 limit annual depreciation deductions to:

$10,200 for the first year without bonus depreciation$18,200 for the […]

Guidance for Claiming Employee Retention Credit in Third and Fourth Quarters of 2021

The IRS has issued guidance for employers claiming the employee retention credit under Code Sec. 3134, enacted by section 9651 of the American Rescue Plan Act of 2021 (ARP), P.L. 117-2, which provides a credit for wages paid after June 30, 2021, and before January 1, 2022. The guidance amplifies previous notices which addressed the employee retention credit under section 2301 of […]

Gross Receipts Safe Harbor for Employers Claiming Employee Retention Credit

The Treasury and IRS have provided an optional safe harbor allowing employers to exclude the following amounts from their gross receipts solely for determining eligibility for the employee retention credit:

the amount of the forgiveness of a Paycheck Protection Program (PPP) Loan;the amount of any Shuttered Venue Operators Grants under the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act; […]

PPP Direct Forgiveness Portal Created, Loan Questionnaire Discontinuance Explained

The U.S. Small Business Administration ( SBA) is launching a streamlined application portal to allow certain borrowers to apply for Paycheck Protection Program (PPP) Loan forgiveness directly through the SBA. The SBA also is explaining why it discontinued use of Loan Necessity Questionnaires for PPP borrowers.

PPP Direct Forgiveness PortalThe SBA announced that it is launching a streamlined application portal to allow borrowers with […]

IRS Releases Information on CTC; Update Portal for Payments

The IRS stated that families should use the Child Tax Credit (CTC) Update Portal to confirm their eligibility for the payments. If eligible, the tool also indicates whether taxpayers are enrolled to receive their payments by direct deposit. More information can be found at https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021.

Direct DepositFor taxpayers currently using direct deposit, the tool will list the full bank routing number and the last […]

Guidance Provided on Premium Assistance for COBRA Continuation Coverage

The IRS provided additional guidance on the application of the American Rescue Plan Act of 2021 (ARP) (P.L. 117-2) relating to temporary premium assistance for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage. This notice supplements Notice 2021-31, I.R.B. 2021-23, and addresses additional issues.

EligibilityThe IRS noted that if the original qualifying event was a reduction in hours or an […]

Foreign Tax Credit Did Not Apply Against Net Investment Income Tax

The foreign tax credit did not apply against the net investment income tax (NIIT). The structure of the Internal Revenue Code made the credit inapplicable to the NIIT, and tax treaties did not override that fact.

Under Code, Foreign Tax Credit Did Not Apply to NIITThe foreign tax credit is in chapter 1, subtitle A of the Code, and it expressly […]

Unknown Gift Tax Return Could Be Reasonable Cause for Late Filing

A missing or unknown federal gift tax return could constitute reasonable cause for the late filing of an estate tax return.

To understand the appropriate steps to take after the decedent’s death, the executor was in contact with the decedent’s tax preparer, a family office service, and an attorney. Several months after the decedent’s death, the attorney advised that no estate […]

Transition Relief Guidance for Employers Claiming the WOTC

The IRS issued transition relief for certain employers claiming the Work Opportunity Tax Credit (WOTC) under Code Sec. 51. This would apply for certain employees beginning work after December 31, 2020, in response to legislation permitting the designation of an Empowerment Zone under Code Sec. 1393(b) to be extended from December 31, 2020, through December 31, 2025. Specifically, section IV of this notice […]

August 2021

IRS Announces New Online Tools to Help Taxpayers Manage Child Tax Credit Payments

The IRS has announced the launch of two new online tools to help families verify, manage and monitor monthly payments of child tax credits under the American Rescue Plan Act (ARP) (P.L. 117-2). These are in addition to the Non-filer Sign-up tool announced last week, which helps families register for child tax credits. The tools are both available through the […]

Penalty Relief for Certain Pass-through Forms

Partnerships, S corporations, and U.S. persons with interests in foreign partnerships may rely on transition relief from penalties for tax years beginning in 2021 with respect to new Schedules K-2 and K-3. These schedules may be required for:

Form 1065, U.S. Return of Partnership Income,Form 1120-S, U.S. Income Tax Return for an S Corporation, andForm 8865, Return of U.S. Persons With […]

No Surprise Billing Act Interim and Proposed Regulations

The Departments of the Treasury, Labor, and Health and Human Services (the Departments), have issued interim final rules and identical proposed regulations to implement provisions of the No Surprises Act. On December 27, 2020, the Consolidated Appropriations Act, 2021 (CAA), which included the No Surprises Act, was signed into law. The No Surprises Act provides federal protections against surprise billing […]

IRS Issues Proposed Electronic Filing Requirements for Specified Returns and Other Documents

The IRS has proposed regulations that would amend the rules for filing electronically and affects persons required to file partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns.

The proposed amendments reflect changes made by the Taxpayer First Act of 2019 […]

Treasury Secretary Yellen Addresses Support for Corporate Global Minimum Tax

Secretary of the Treasury Janet L.Yellen addressed the support for a global minimum tax for corporations at a press conference at the close of the G20 Finance Ministers and Central Bank Governors Meetings, on July 11, 2021, see https://home.treasury.gov/news/press-releases/jy0270. Secretary Yellen stated that now 132 countries, representing more than 90 percent of global GDP have agreed to the outline of a […]

Farm NOL Election Procedures Provided

The IRS has provided a procedure for making elections and revocations under Act Sec. 2303(e) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) ( P.L. 116-136) for taxpayers with a net operating loss (NOL) for any tax year beginning in 2018, 2019, or 2020, all or a portion of which consists of a farming loss (farming loss NOLs). […]

IRS Provides Answers to Question Pertaining to Treasury Grants and Related Taxes

The IRS has provided answers to questions that certain transportation companies may have regarding Treasury grants and related taxes, https://www.irs.gov/newsroom/coronavirus-economic-relief-for-transportation-services-certs-frequently-asked-questions. These companies must largely prioritize the use of the grants for payroll costs, though grants may be used for operating expenses, including the acquisition of services and any equipment needed to protect workers and customers from COVID-19. In addition, the funds […]

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