One of the most pressing audit issues for large taxpayers today centers on the Internal Revenue Code (Code) Section 965 transition tax. The Internal Revenue Service (IRS) has designated Code Section 965 as a campaign issue and is actively auditing taxpayers transition tax calculations and positions, along with other tax reform items. The stakes are high, particularly given the potential to pay this tax over a period of eight years.
On March 23, 2021, the IRS released a Practice Unit that provides an overview of the Code Section 965 transition tax with references to relevant resources. Unfortunately, unlike some other Practice Units, guidance is not provided as to the type of information revenue agents should be requesting from taxpayers.
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Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 14 – December 18, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.
December 14, 2020: The IRS released Notice 2020-88 updating and amplifying procedures for Phase III of the section 48A advanced coal credit.
December 16, 2020: The IRS issued Revenue Ruling 21-01 providing various rates for determining the issue price of certain debt instruments issued for property.
December 16, 2020: The IRS issued Notice 21-01 delaying mandatory e-filing of Form 4720 by private foundations and announcing certain other changes.
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