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March 8, 2019

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Issue Number:  2019-06

Inside This Issue

  1. Tax Relief and Deadline Extensions for Alabama Disaster Victims
  2. New Due Diligence Requirements this Filing Season
  3. Revision of Special Enrollment Exam Delayed/Revised Test Specifications Now Available
  4. Annual ‘Dirty Dozen’ List of Most Prevalent Tax Scams
  5. YouTube: How to Use the Withholding Calculator for Paycheck Checkup
  6. IRS Issues Proposed Regulations on Deduction for Foreign-derived Intangible Income and Global Intangible Low-Taxed Income
  7. Required Minimum Distributions Begin April 1
  8. Technical Guidance

1.  Tax Relief and Deadline Extensions for Alabama Disaster Victims


Victims of severe storms, tornadoes, and straight-line winds that occurred in parts of Alabama on March 3 may be eligible for tax relief from the IRS. Additionally, disaster victims will have until July 31, to file certain individual and business tax returns and make certain tax payments. 

Visit the IRS disaster relief page for details on other returns, payments and tax-related actions qualifying for the additional time. For information on disaster recovery, visit disasterassistance.gov.


2.  New Due Diligence Requirements this Filing Season


This filing season tax professionals should be aware of the revised Form 8867, Paid Preparer’s Due Diligence Checklist, which covers the new Credit for other Dependents (ODC) and Head of Household (HOH) filing status in addition to the Child Tax Credit/Additional Child Tax Credit, American Opportunity Tax Credit, and Earned Income Tax Credit.

IRS is sending Letter 5364 to tax preparers who completed at least six 2018 paper returns claiming any of the credits shown above or HOH filing status without attaching Form 8867. To learn more, check out the Reaching Out to Preparers page on the Tax Preparer Toolkit.


3.  Revision of Special Enrollment Exam Delayed; Revised Test Specifications Now Available


The government shutdown has delayed the annual revision of the Special Enrollment Examination (SEE). The examination to be administered starting on May 1, 2019, has not yet been updated and reflects tax law for the calendar year 2017. A revised examination will be released on July 1, 2019, and will be based on tax law for the calendar year 2018.

To ensure that the SEE accurately incorporates the changes resulting from the Tax Cuts and Jobs Act and continues to reflect the skills and knowledge necessary to be an enrolled agent, the IRS commissioned a review and update of the SEE test specifications. Enrolled agents from the private sector and subject matter experts from the IRS participated in updating the test content. As a result, there were changes to the test specifications affecting test content topics for the SEE to be administered beginning July 1, 2019.  

To review the revised test specifications, visit www.prometric.com/see and choose Step 3, Review Exam Content Outlines.


4.  Annual ‘Dirty Dozen’ List of Most Prevalent Tax Scams


The IRS kicked off its annual “Dirty Dozen” list of common tax scams this week and warned of the ongoing threat of internet phishing scams that lead to tax-related fraud and identity theft. Visit IRS.gov to review all of the 2019 “Dirty Dozen” scams.


5.  YouTube: How to Use the Withholding Calculator for Paycheck Checkup


Help your client do a paycheck checkup using the IRS Withholding Calculator by watching this new YouTube video https://youtu.be/hvf010Ptb84.

Watch this and other videos on the IRS’s YouTube Channel.


6.  IRS Issues Proposed Regulations on Deduction for Foreign-derived Intangible Income and Global Intangible Low-Taxed Income


The IRS issued proposed regulations under section 250 of the Internal Revenue Code, which offers domestic corporations deductions for foreign-derived intangible income (FDII) and global intangible low-taxed income. These proposed regulations provide guidance on both the computation of the deductions available under section 250 and determination of FDII.

New reporting rules requiring the filing of Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income, are also described in the proposed regulations. Treasury and IRS welcome public comments on these proposed regulations.


7.  Required Minimum Distributions Begin April 1


The IRS reminded individuals this week that, in most cases, April 1, 2019, is the date by which persons who turned age 70˝ during 2018 must begin receiving payments, required minimum distributions (RMDs), from Individual Retirement Accounts (IRAs) and workplace retirement plans.

For answers to questions about RMDs, visit Retirement Plan and IRA Required Minimum Distributions FAQs


8.  Technical Guidance


Notice 2019-18 informs taxpayers that the Treasury Department and the IRS no longer intend to amend the required minimum distribution regulations under section 401(a)(9) of the Internal Revenue Code to address the practice of offering retirees and beneficiaries who are currently receiving annuity payments under a defined benefit plan a temporary option to elect a lump-sum payment in lieu of future annuity payments.

Notice 2019-20 provides a waiver of penalties under sections 6722 and 6698 to certain partnerships that file Schedules K-1 that fail to report information about partners’ negative tax basis capital accounts for the partnerships' 2018 tax year. The relief is conditioned on the partnerships providing the missing information in a separate schedule by March 15, 2020.