Lately on the Hill
- Sen. John Hickenlooper wrote a letter to the chair of the SEC urging the agency to write rules for crypto securities, including (but not limited to):
- Clarifying what types of digital assets are securities
- Addressing how to issue and list digital securities
- Determining what disclosures are necessary for investors to be properly informed
- Establishing a registration regime for digital asset security trading platforms
- Setting rules on how trading and custody of digital assets should be carried out
- The IRS issued Rev. Proc. 2022-19 with guidance on how taxpayers can resolve certain issues involving S corporations and their shareholders without requesting a private letter ruling.
- Here are the six issues covered in this guidance:
- Agreements and arrangements with no principal purpose to circumvent one class of stock requirement
- Governing provisions that provide for identical distribution and liquidation rights
- Procedures for addressing missing shareholder consents, errors regarding a permitted year, missing officer's signature, and other inadvertent errors and omissions
- Procedures for verifying S elections or QSub elections
- Procedures for addressing a federal income tax return filing inconsistent with an S election or a QSub election
- Procedures for retroactively correcting one or more non-identical governing provisions
- Note, the IRS has confirmed that the guidance also applies for retroactively fixing an invalid S corp election for an LLC that failed to update its operating agreement before filing the election.
- Here are the six issues covered in this guidance:
- Fixing the “family glitch” in the Affordable Care Act (ACA) has been a priority for the Biden administration, with President Biden instructing federal agencies to do “everything in their power to expand affordable, quality health coverage.” Last week, the U.S. Department of the Treasury (Treasury) issued final regulations fixing the “family glitch.”
- The regulations provide that affordability of employer-sponsored minimum essential coverage for family members of an employee should be determined based on the employee's share of the cost of covering the employee and those family members, not the cost of covering only the employee
- This guidance affects taxpayers who enroll, or enroll a family member, in individual health insurance coverage through a Health Insurance Exchange and who may be allowed a premium tax credit for the coverage
- These regulations are effective December 12, 2022
- Also, in Notice 2022-41, the IRS expanded the “change in status” rules for health coverage under a cafeteria plan, allowing employees to prospectively opt out of family coverage and enroll in self-only coverage under the same health plan
IN CASE YOU MISSED IT
- The Organisation for Economic Co-operation and Development issued a Crypto-Asset Reporting Framework outlining a new system of information exchanges between national governments regarding crypto assets.
- The IRS will be sending letters to more than 9 million individuals and families who appear to qualify for a variety of key tax benefits, like the 2021 Recovery Rebate Credit, the Child Tax Credit, the Earned Income Tax Credit, etc., but did not claim the credits by filing a 2021 federal income tax return.
- The IRS released a new draft Schedule UTP, Uncertain Tax Position Statement, and updated form instructions to provide taxpayers with additional guidance on adequate disclosure. Schedule UTP is filed with the Form 1120 series by corporations with at least $10 million in assets that issue audited financial statements and take an uncertain tax position on their returns.
- The Treasury Inspector General for Tax Administration issued several audit reports recently, including a finding that 98% of the advance Child Tax Credit payments sent by the IRS were correctly issued, and that the Form 1023-EZ application process does not equip the agency to determine whether an applicant is eligible for tax-exempt status.
- The IRS is expanding dyed diesel penalty relief because of Hurricane Ian. The IRS will not impose a penalty when dyed diesel fuel with a sulfur content that does not exceed 15 parts-per-million is sold for use or used on the highway in the state of Florida. Previously, this penalty relief only applied to emergency vehicles.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.