Monthly Archives: August 2024

According to Law360, Fifty-eight tax jurisdictions have pledged to implement the Organization for Economic Cooperation and Development's crypto-asset information exchange system by 2027, the OECD said Thursday.

Members of the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes are in position for "rapid implementation" of the crypto-asset reporting framework, or CARF, the forum said in a report. The framework has the potential to bring substantial tax benefits by ensuring taxpayers are properly declaring their holdings of cryptocurrency and other digital assets, the report said.

The report was created for finance ministers and central bank governors of the Group of 20 nations, who are meeting in Brazil through Friday, the forum said.

The Global Forum's CARF group is using the rollout of the common reporting standard, the OECD's broader global information exchange model, as a guide for the implementation of the CARF, the report said. For example, it borrowed the common timeline principle, which aims to have jurisdictions committed to establishing the standards by a certain date.

Ten of the jurisdictions that have agreed to implement the CARF are developing nations, the report said.

The CARF group is aiming to identify and engage with all potentially relevant jurisdictions in advance of the 2024 Global Forum plenary meeting, the report.

Read more at: Tax Times blog

The Joint Chiefs of Global Tax Enforcement  (J5) released its first report, detailing  that the intergovernmental tax enforcement group is investigating more than 30 active cybercrime cases tied to financial and tax criminal activities all over the world.his link will download a file

During the J5’s first 6 years, it has generated more than a hundred leads, seized millions of dollars in criminal proceeds, issued notices to financial institutions and thwarted fraudulent investment and boiler-room schemes. 

Read more at: Tax Times blog

The Internal Revenue Service is continuing to expand the features within Business Tax Account (BTA), an online self-service tool for business taxpayers that now allows them to view and make balance-due payments.

Launched last fall, BTA is a key part of the agency’s service improvement initiative funded under the Inflation Reduction Act (IRA). When fully developed, BTA will allow many types of business taxpayers to check their tax history, make payments, view notices, authorize powers of attorney and conduct other business with the IRS.

With the latest expansion, an eligible business taxpayer can now use BTA to pay Federal Tax Deposits (FTDs) and see and make a payment on their full balance due, all in one place. The account is also now accessible in Spanish with more translations planned. 

BTA is a key part of the agency’s ongoing work to transform and modernize service at the IRS by offering a seamless and convenient digital experience. It’s also an important part of a wide-ranging initiative to reduce paper-based processes that hamper the IRS and frustrate taxpayers.

Who can use BTA now?

Business taxpayers who can activate and use their IRS business tax account include:

• A sole proprietor who has an Employer Identification Number (EIN) issued by the IRS.
• An individual partner or individual shareholder with both:
• A Social Security number or an individual tax ID number (ITIN).
• A Schedule K-1 on file (for partners, from 2012-2023; for shareholders, from 2006-2023).

Currently, a limited liability company that reports business income on a Schedule C can’t access Business Tax Account. Future access will be available for these businesses, as well as other entities including tax-exempt organizations, government agencies, partnerships, C corporations and S corporations.

What can business taxpayers do now?

Within BTA, business taxpayers can now:

• View and make a payment toward a balance due by using a bank account. This includes a payment on a return filed for the current year as well as late payments for past tax years and Federal Tax Deposits.

• Schedule a payment for any business day for up to a year and cancel a scheduled payment.
• View recently processed payments, including payments made through the Electronic Federal Tax Payment System (EFTPS) online, wire transfers, checks or money orders, and see if any payments were returned or refused.
• Store multiple bank accounts in their online “wallet” to manage tax payments.
• Request a tax compliance check.
• View the business name and address on file.
• Give account access to employees of the business.
• Register for clean energy credits (if eligible).
• View and download transcripts for various payroll, income and excise tax returns.
• Sole proprietors can now download business entity transcripts from their BTA account. The transcript shows entity information like business name, mailing address, location address and more for the Employer Identification Number on file.
• View and download select digital notices including:
• CP080: Reminder - We Have Not Received Your Return, Credits May be on Your Account.
• CP136: Annual Notification of Federal Tax Deposit (FTD) Requirements (Forms: 941, 941-SS).
• CP216F: Application for Extension of Time to File an Employee Plan Return – Approved.

What new features will be added to BTA in the future?

Future capabilities made available through funding from the IRA will enable access by all business and organizational entities and help the business tax account become a robust online self-service tool.

To set up a new business tax account, or for more information visit Business Tax Account.

Read more at: Tax Times blog

The IRS has released new proposed regulations on making and revoking certain foreign currency gain or loss elections. These new proposals withdraw 2017 proposed regs §1.954-2(g)(3)(iii) and (g)(4)(iii) and proposed §1.988-7(c) through (e) and repropose them with revisions. (Preamble to Prop Reg REG-111629-23, 8/19/2024).

The IRS received comments about the 2017 proposals from practitioners who noted that the language of §1.954-2(g)(3)(ii) is inconsistent with other CFC filing requirements, which generally must be filed by U.S. shareholders for the tax year of a CFC that ends with or within the U.S. shareholders' tax year. 

In response to those comments, the IRS has issued a new set of proposed regs.

These new proposals would revise Reg §1.954-2(g)(3)(ii) to provide that controlling U.S. shareholders could make a §1.954-2(g) election on behalf of a CFC by filing a statement, clearly indicating that the election has been made, with their original income tax returns for the tax years of the controlling U.S. shareholders in which or with which the tax year of the CFC ends.

Additionally, these proposed regulations withdraw 2017 proposed §1.954-2(g)(3)(iii) and (g)(4)(iii). The IRS' new proposals would provide that controlling U.S. shareholders revoke a §1.954-2(g) election on behalf of a CFC by filing a statement that clearly indicates the election has been revoked with their original income tax returns for the tax years of the controlling U.S. shareholders in which or with which the tax year of the CFC ends.

Under new Prop Reg §1.954-2(g)(3)(iii) and Prop Reg §1.954-2(g)(4)(iii), controlling U.S. shareholders would be precluded from revoking a §1.954-2(g) election made on behalf of a CFC (including an initial election) until six years after the year in which the election was made. Additionally, the new proposals would provide that if a CFC's controlling U.S. shareholders revoke a §1.954-2(g) election, they may not make a new §1.954-2(g) election on behalf of the CFC until six years after the year in which the previous election was revoked.

According to the IRS, this change to the revocation rules "would limit taxpayers from opportunistically making or revoking a §1.954-2(g) election." For example, this change would limit taxpayers' ability to selectively recognize certain foreign currency losses.

Other proposals contained in this NPRM include changes to 2017 proposed regs §1.988-7(c) through §1.988-7(e).

For example, new Proposed Reg §1.988-7(d) would provide that the election made pursuant to proposed §1.988-7(c) is subject to rules like those imposed on Code Sec. 475 elections. The election would be effective for the tax year for which it is made and all subsequent years. The new proposal would provide that a taxpayer may revoke the election only with the IRS' consent.

Generally, these proposed regulations would apply to tax years ending on or after the date final regulations are published in the Federal Register (the "finalization date").

Taxpayers can rely on these proposed regulations and the treatment of certain elections, or revocation of elections, made in earlier periods.

Read more at: Tax Times blog