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Author Archive for Lisa Varela

lvarela

Child Tax Credit Letters Being Sent

Child Tax Credit Letters Being Sent The IRS has started sending letters to over 36 million families who, based on tax returns filed, may be eligible to receive monthly child tax credit payments starting July. Eligibility of these families are being evaluated based on information provided by taxpayers in their 2019 or 2020 tax returns, […]

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lvarela

Information Reporting Waived for Nontaxable COVID Assistance

Information Reporting Waived for Nontaxable COVID Assistance The IRS has waived the requirement to file Form 1099 series information returns or furnish payee statements for certain COVID-related relief that is excluded from gross income. Reporting Affected The IRS waives the requirement to file Form 1099 series information returns, or furnish payee statements, for the following: […]

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lvarela

Relief for Automobile Lease Valuation Rule Users

Relief for Automobile Lease Valuation Rule Users Due to the COVID-19 pandemic, certain employers and employees who use the automobile lease valuation rule to determine the value of an employee’s personal use of an employer-provided automobile may switch to the vehicle cents-per-mile method. Background Under the general rule, an employer who provides an employee a […]

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lvarela

Relief for Certain Excess Business Loss-Related Underpayments

Relief for Certain Excess Business Loss-Related Underpayments Estimated tax underpayment penalties under Code Sec. 6654 are waived for certain excess business loss-related payments for tax years beginning in 2019. The relief is available to individuals, as well as trusts and estates that are treated as individuals for estimated tax payment penalty purposes. Rules Delayed Certain […]

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lvarela

Period for Paying Deferred Employee Payroll Tax Extended

Period for Paying Deferred Employee Payroll Tax Extended The IRS has extended the time period during which employers must withhold and pay the employee portion of Social Security tax that employers elected to defer on wages paid from September 1, 2020, through December 31, 2020. Specifically: the end date of the period for withholding and […]

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lvarela

Reporting Penalty Relief for Partnerships

Reporting Penalty Relief for Partnerships The IRS has issued guidance that provides partnerships with relief from certain penalties for the inclusion of incorrect information in reporting their partners’ beginning capital account balances on the 2020 Schedules K-1 (Forms 1065 and 8865). The IRS has also provided relief from accuracy-related penalties for any tax year for […]

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lvarela

Final Regs Address the Deduction Limit for Compensation in Excess of $1,000,000

Final Regs Address the Deduction Limit for Compensation in Excess of $1,000,000 Final regulations provide guidance related to the limitation on the deduction for employee compensation in excess of $1 million. Specifically, the regulations address: what constitutes a publicly held corporation for purposes of Code Sec. 162(m)(2); the definition of a covered employee for purposes […]

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lvarela

Additional Final Regulations on Section 163(j) Issued

Additional Final Regulations on Section 163(j) Issued The IRS has issued final regulations providing additional guidance on the limitation on the deduction for business interest under Code Sec. 163(j). The regulations finalize various portions of the proposed regulations issued in 2020 with few modifications. They address the application of the limit in the context of […]

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lvarela

Final Regulations Address Deductibility of Fines and Penalties

Final Regulations Address Deductibility of Fines and Penalties The IRS has released final regulations that address the changes made to Code Sec. 162(f) by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97), concerning the deduction of certain fines, penalties, and other amounts. The final regulations also provide guidance relating to the information reporting […]

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