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June 14, 2019

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Issue Number:  2019-20

Inside This Issue

1.     Last Chance for IRS Nationwide Tax Forum Early-Bird Rate

2.     IRS Expands Secure Messaging Program; Encourages Tax Pros to Participate

3.     Upcoming Webinars: Restaurant Industry Employment/Payroll Taxes and Tax Transcript Alternatives

4.     Tax Relief for Nebraska, South Dakota, Oklahoma and Arkansas Disaster Victims

5.     Reminder: Recent Changes to Taxes on Foreign Activities

6.     Understanding Backup Withholding Notices

7.     Technical Guidance


1.  Last Chance for IRS Nationwide Tax Forum Early-Bird Rate


The IRS Nationwide Tax Forums Early-Bird rate of $235 is available through Saturday, June 15 for all forum locations. After this date, the standard rate of $255 will be in effect until two weeks from the start of each forum. Join your colleagues at our first location, National Harbor, Md., just outside Washington, DC, on July 9-11.

To learn more about the forums, view our new YouTube video. To register, visit www.irstaxforum.com.


2.  IRS Expands Secure Messaging Program; Encourages Tax Pros to Participate


This year the IRS will invite more than 50,000 taxpayers to participate in the Secure Messaging Taxpayer Digital Communication program, which permits taxpayers to receive messages, respond to questions and upload documents using the Secure Messaging portal. The IRS began the program focusing on Forms 1040 with Schedule A and education credits and has now expanded it to include child care credits and Schedule C issues.

The IRS welcomes tax professionals to participate. However, the program is by invitation only, and your client must receive an audit letter inviting him to participate. Also, your client needs to register for Secure Messaging before you do. After you register and have a valid authorization on file, you will have access to your own mailbox to communicate with the IRS. 


3.  Upcoming Webinars: Restaurant Industry Employment/Payroll Taxes and Tax Transcript Alternatives


The IRS and the California Department of Tax and Fee Administration will present the webinar, Employment/Payroll Taxes for the Restaurant Industry, at 1 p.m. ET on June 18. The webinar will provide information on employment/payroll taxes, sales and use tax for the prepared food industry and teach participants how to avoid the most common tax related mistakes made by restaurants and food vendors.

Additionally, Tax Transcripts: Alternatives to Faxing and Third-Party Mailing, will be presented at 2 p.m. ET on June 19. The webinar will outline the options for tax professionals to obtain tax transcripts, as the IRS will stop faxing transcripts and end third-party mailing options from the Form 4506.

Visit the Upcoming Webinars page on IRS.gov for a complete list of webinars.


4.  Tax Relief for Nebraska, South Dakota, Oklahoma and Arkansas Disaster Victims


Storm victims in the following states may qualify for tax relief:

  • Nebraska for severe winter storm, straight-line winds and flooding that took place on March 9
  • South Dakota for severe storms, tornadoes, straight-line winds and flooding that began on March 13
  • Oklahoma for severe storms, tornadoes, straight-line winds and flooding that took place on May 7
  • Arkansas for severe storms and flooding that took place on May 21 

Visit the IRS disaster relief page for all updates on tax relief for disaster victims.


5.  Reminder: Recent Changes to Taxes on Foreign Activities


The Tax Cuts and Jobs Act made major changes to the way the federal government taxes foreign activities. Significant changes involve:

  • Foreign tax credits/dividends received
  • Special rules relating to sales or transfers involving specified 10-percent owned foreign corporations
  • Treatment of deferred foreign income upon transition to participation exemption system of taxation
  • Global Intangible Low-Taxed Income
  • Deduction with respect to foreign-derived intangible income and global intangible low-taxed income
  • Hybrid transactions/entities
  • Shareholders of surrogate foreign corporations not eligible for reduced rate on dividends
  • Tax on base erosion payments of taxpayers with substantial gross receipts.

See Tax Cuts and Jobs Act: A comparison for large businesses and international taxpayers for more information on the treatment of foreign income. This side-by-side comparison for large and international taxpayers can help individuals understand the changes and plan accordingly. Updates on this and other TCJA international provisions can also be found on the International Taxpayers and Businesses page of IRS.gov.


6.  Understanding Backup Withholding Notices


Have your clients received Backup Withholding CP2100 or CP2100A Notices? The IRS issues these notices to inform payers of certain types of income payments that backup withholding may need to begin. Backup withholding begins if a taxpayer identification number (TIN) is missing or if incorrect name/TIN combinations occur. Payers who receive these notifications should compare the information in the notice with their records and do the following:

  • For missing TINs: Determine if backup withholding is already set up. If not, begin immediately.
  • For incorrect TINs: Compare the accounts on the listing. If they agree, notify the taxpayer. If not, correct or update.

Payers do not need to send corrections made to the IRS and should not respond to the notice. For more information, see Publication 1281, Backup Withholding for Missing and Incorrect Name/TIN(S).


7.  Technical Guidance


Notice 2019-12 announces that Treasury and the IRS intend to publish a proposed regulation providing a safe harbor under section 164 for certain individuals who make a payment to or for the use of an entity described in section 170(c) in return for a state or local tax credit.

Notice 2019-40 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3), and the 24-month average segment rates under section 430(h)(2) of the Internal Revenue Code.