President Obama signed trade legislation that includes an extension of a health care tax credit and other tax provisions. The IRS, meanwhile, issued expatriate health plan guidance and provided specifications for the private printing of red-ink substitutes for the 2015 revisions of information returns, preparing acceptable substitutes of the official forms and using official or acceptable substitute forms to furnish information to recipients. Additionally, the Supreme Court extended same-sex marriage nationwide and upheld the Code Sec. 36B regulations.
President Obama on June 29 signed the Trade Preferences Extension Act (P.L. 114-27), which extends the health care tax credit (HCTC) and revises several tax provisions. (TAXDAY, 2015/06/30, W.1). The president also signed the Defending Public Safety Employees’ Retirement Act (P.L. 114-26), which was the vehicle for trade promotion authority (TPA). For more details about the trade bills, see the special Briefing on IntelliConnect.
In D. King v. S. Burwell, SCt, 2015-1 ustc ¶50,356, the Supreme Court held that enrollees in both state-run and federally facilitated Health Insurance Marketplaces (previously referred to as Exchanges) could claim the Code Sec. 36B premium assistance tax credit, if eligible (TAXDAY, 2015/06/26, J.1). In J. Obergefell v. R. Hodges, SCt, 2015-1 ustc ¶50,357, the Court extended same-sex marriage nationwide (TAXDAY, 2015/06/29, J.1). For more details about both decisions, see the special Briefing on IntelliConnect.
Senate. Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, and committee member Charles E. Grassley, R-Iowa, are asking the IRS to explain its handling of Code Sec. 36B premium assistance tax credit claims and the procedures it uses to reconcile those claims with overpayments of the Advanced Premium Tax Credit (APTC) under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) TAXDAY, 2015/07/01, C.1 . The Treasury Inspector General for Tax Administration (TIGTA) has highlighted shortcomings in the preparation for processing PTC claims. TIGTA also discovered problems with the procedures used to reconcile APTC overpayments. Only individuals who obtain health insurance through the Health Insurance Marketplace may claim the Code Sec. 36B credit.
Sen. Bernie Sanders, I-Vt., on June 25 introduced legislation to increase estate tax rates on individuals who inherit more than $3.5 million (TAXDAY, 2015/06/30, C.1). Sander’s bill would lower the estate tax exemption level from $5.4 million to $3.5 million for individuals and from approximately $11 million to $7 million for couples.
Customer Service. The Treasury Inspector General for Tax Administration (TIGTA) issued a report finding that the IRS has made progress in providing taxpayers with online customer service options (Ref. No.: 2015-40-053; TAXDAY 2015/07/06, T.1). However, the IRS needs to prioritize the completion of key information technology projects to provide the electronic platform for developing future projects that will provide taxpayers with dynamic online access capabilities.
Nonqualified Deferred Compensation. The IRS has released a new Audit Techniques Guide (ATG), Nonqualified Deferred Compensation (TAXDAY 2015/06/29, I.4). The ATG addresses the four basic categories of NQDC plans, the difference between funded and unfunded plans, and audit potential.
Online Resources. The IRS has reminded taxpayers that a range of publications and resources are available in six languages on its website (IR-2015-94; TAXDAY 2015/07/06, I.2). Besides English and Spanish, the website features resources in Chinese, Korean, Russian and Vietnamese. These multilingual resources are available year-round and not just during tax season.
Expatriate Health Plans. The IRS has issued interim guidance on the application of certain provisions of the PPACA to expatriate health insurance issuers, expatriate health plans, and employers in their capacity as plan sponsors of expatriate health plans, as defined in the Expatriate Health Coverage Clarification Act of 2014 (EHCCA) (P.L. 113-235) (Notice 2015-43; TAXDAY 2015/07/01, I.2). Under the guidance, pending the issuance of regulations, employers and plan sponsors may apply the requirements of the EHCCA using a reasonable good-faith interpretation.
Get more information about our Affordable Care Act resources and download our complimentary tax briefings:
- Supreme Court Decisions Impact ACA, Same-Sex Marriage
- Trade Legislation Tax Provisions
- 2015 Post-Filing Season Update
- Fiscal Year (FY) 2016 Budget Proposals
Forms 990. The IRS announced that it has been considering how to incorporate new technology to produce electronic versions of the publicly available portions of exempt organization returns (Forms 990) in MEF, Metadata Exchange Format (or machine readable format) (TAXDAY 2015/07/01, I.1). In
Public.Resource.Org, DC Calif., 2015-1 ustc ¶50,174, a federal district court ordered the IRS to make available these forms to Public.Resource.Org in a machine readable format.
Substitute Information Returns. The IRS has provided the specifications for the private printing of red-ink substitutes for the 2015 revisions of information returns, preparing acceptable substitutes of the official forms, and using official or acceptable substitute forms to furnish information to recipients (Rev. Proc. 2015-35; TAXDAY 2015/06/29, I.1). The procedures cover Forms 1096, 1097-BTC, 1098 series, 1099 series, 3921, 3922, 5498 series, W-2G, 1042-S and 8935.
The tangible property regulations (TPRs) are the biggest change in tax implementation and preparation for businesses since the 1986 Tax Reform Act. With this year's filing season, CPAs and businesses are now understanding the significant burden and work effort required to implement the TPRs – a.k.a. the "repair regs."
Many practitioners thought that after the release of IRS Rev. Proc. 2015-20 the TPRs could simply be ignored. But, now knowing that Rev. Proc. 2015-20 was not the total "relief" to the TPRs that many thought, "solutions" or "fixes" are needed to deal with their situations. Further, the TPRs cannot be ignored for practitioners due to the potential liability for missed taxpayer TPR deductions and lost opportunities.
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