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March 22, 2019

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Issue Number:  2019-08

Inside This Issue

1.     IRS Expands Penalty Relief for Taxpayers Whose Payments Fell Short in 2018

2.     New Questions & Answers Available for Section 965 Reporting and Payments

3.     IRS Nationwide Tax Forums Offer More than Continuing Education

4.     March 28 Webinar: Understanding How to Do a Paycheck Checkup

5.     Revised 2019 Form 656 Booklet, Offer in Compromise, Online March 25

6.     IRS to Update Allowable Living Expense Standards for 2019

7.     IRS Issues Proposed Regulations on New Reporting Requirements for Life Insurance Contract Transactions

8.     Technical Guidance


1.  IRS Expands Penalty Relief for Taxpayers Whose Payments Fell Short in 2018


The IRS provided additional expanded penalty relief to taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year by lowering to 80 percent the threshold required to qualify for this relief. The IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.

The revised waiver computation will be integrated into commercially-available tax software and reflected in the forthcoming revision of the instructions for Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. The IRS urges everyone to take a Paycheck Checkup and review their withholding for 2019. Additionally, the updated Withholding Calculator is now available on IRS.gov.


2.  New Questions & Answers Available for Section 965 Reporting and Payments


The IRS this week released three additional Questions and Answers about Tax Year 2018 Reporting and Payments Arising under Section 965. These filing and payment obligations affect U.S. shareholders that are domestic corporations that own an interest in a foreign corporation. Review the new questions and answers, numbered seven, eight and nine, on IRS.gov.


3.  IRS Nationwide Tax Forums Offer More than Continuing Education


Educational seminars are just one benefit you get when you attend the 2019 IRS Nationwide Tax Forums. Others include the Case Resolution Program, opportunities to talk with IRS subject matter experts, workshops, and networking opportunities with your colleagues. Register now at www.irstaxforum.com.


4.  March 28 Webinar: Understanding How to Do a Paycheck Checkup


The 60-minute webinar Understanding How to Do a Paycheck Checkup will be presented on March 28 at 2 p.m. Eastern Time. This webinar will provide an overview of who should do a paycheck checkup and how to use the IRS Withholding Calculator. One continuing education credit is offered for this webinar.


5.  Revised 2019 Form 656 Booklet, Offer in Compromise, Online March 25


The 2019 revision of the Form 656 Booklet, Offer in Compromise (OIC) will be available for download on IRS.gov on March 25. The booklet contains current forms and instructions for submitting an OIC. Using previous versions of the booklet may result in delayed processing of OIC applications. Use the OIC Pre-Qualifier Tool to confirm that your client is eligible for an OIC and to calculate a preliminary offer amount.


6.  IRS to Update Allowable Living Expense Standards for 2019


Allowable Living Expense (ALE) standards for 2019 will also be available March 25. The ALE Standards reduce subjectivity when determining what a taxpayer may claim as basic living expenses necessary to avoid undue hardship when the taxpayer must delay full payment of a delinquent tax. The standard allowances provide consistency and fairness in collection determinations by incorporating average expenditures for basic necessities for citizens in similar geographic areas.


7.  IRS Issues Proposed Regulations on New Reporting Requirements for Life Insurance Contract Transactions


The IRS issued proposed regulations this week on the new information reporting requirements for certain life insurance contracts under the Tax Cuts and Jobs Act (TCJA). The proposed regulations contain transitional guidance delaying any reporting until final regulations are issued, and they provide taxpayers additional time to satisfy any reporting obligations for sales or payments made prior to publication of final regulations.

The reporting requirements are designed to help persons who sell life insurance contracts properly report any gain from that sale. The IRS has released Form and Instructions for 1099-LS and Form and Instructions for Form 1099-SB, which provide specific instructions on these reporting requirements. For information about other TCJA provisions, visit IRS.gov/tax-reform.


8.  Technical Guidance


Revenue Procedure 2019-14 provides issuers of qualified mortgage bonds, as defined in section 143(a) of the Internal Revenue Code, and issuers of mortgage credit certificates, as defined in section 25(c), with (1) nationwide average purchase prices for residences located in the United States, and (2) average area purchase price safe harbors for residences located in statistical areas in each state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands, and Guam.

Notice 2019-26 sets forth the updated mortality improvement rates and static mortality tables that are used for purposes of determining: 1) the minimum funding requirements under section 430(h)(3) for 2020; and 2) the minimum present value under section 417(e)(3) for distributions with annuity starting dates that occur during stability periods beginning in the 2020 calendar year. 

Revenue Ruling 2019-09 suspends two 1957 revenue rulings pending completion of a study regarding the active conduct of a trade or business requirement under sections 355(a)(1)(C) and (b).