The president signed a measure on August 10 that shifts the timing of corporation estimated tax payments in 2017 for corporations with $1 billion or more in assets. Meanwhile, during the week of August 13, the IRS issued the September applicable federal rates (AFRs), as well as guidance on the 25-year average segment rates that are applied to adjust the otherwise applicable 24-month average segment rates that are used to compute the funding target and other items under Code Sec. 430 and section 303 of the Employment Retirement Income Security Act of 1974 (ERISA).
President Obama on August 10 signed an Africa trade bill (P.L. 112-163 ), which passed the House and Senate on August 2, that shifts the timing of corporation estimated tax payments in 2017 for corporations with $1 billion or more in assets (TAXDAY, 2012/08/20, W.1 ). The amount of taxes due in July, August or September of 2017 will be set at 100.25 percent of the amount ordinarily due. Tax payments will be reduced in the following installment to reflect the overpayment.
Treasury Guidance Update. Temporary and proposed regulations regarding corporate inversions and whether a foreign corporation has substantial business activities in a foreign country (T.D. 9592 , I.R.B. 2012-28, 41, NPRM REG-107889-12 , I.R.B. 2012-28, 53) contain multiple bright-line tests, a Treasury official said during an August 16 webcast (TAXDAY, 2012/08/17, T.3 ). The official also listed guidance projects on which the government is actively working, which include guidance under Code Secs. 361 , 367 , 304 , 901(m) and 959 .
CDP Audit Report. The Treasury Inspector General for Tax Administration (TIGTA) found the same deficiencies in the IRS’s processing of Collection Due Process cases that it had reported previously (TAXDAY, 2012/08/16, T.1 ). Appeals did not always classify the case correctly; therefore, some taxpayers received the wrong type of hearing. Appeals personnel do not always document their impartiality through the Form 12257 waiver issued to taxpayers, and there was an increase in errors relating to the determination of the collection statute expiration date (CSED) on taxpayer accounts.
September 2012 AFRs. The IRS has provided the various prescribed rates for federal income tax purposes for September 2012 (Rev. Rul. 2012-24 ; TAXDAY, 2012/08/20, I.1 ).
LB&I Tiered Issues. The IRS Large Business & International Division issued an internal memorandum stating that it will no longer manage exam issues through the Tiered Issue Process used in audits of possible tax shelter issues (TAXDAY, 2012/08/20, I.6 ). In place of the Tiered Issue Process, LB&I is developing a knowledge management network through the use of Issue Practice Groups (“IPGs” ) for domestic issues and International Practice Networks (“IPNs” ) for international issues.
Segment Rates. The IRS released guidance on the 25-year average segment rates that are applied to adjust the otherwise applicable 24-month average segment rates that are used to compute the funding target and other items under Code Sec. 430 and section 303 of the Employment Retirement Income Security Act of 1974 (ERISA) (Notice 2012-55 ; TAXDAY, 2012/08/17, I.1 ).
New Return Preparer Office Director. Carol Campbell, IRS deputy chief of staff, will replace David Williams as director of the Return Preparer Office (TAXDAY, 2012/08/16, I.2 ). Campbell, who became IRS deputy chief of staff in May 2012, has more than 20 years of IRS experience, including eight years as a senior docket attorney in Chief Counsel before moving up to become counsel to the National Taxpayer Advocate.
EP Plans Update. The IRS Employee Plans (EP) examination function seeks to maintain compliance by qualified plans, protect plan benefits and ensure retirement security, IRS Employee Plans Examination Director Monika Templeman said during an August 14 webcast (TAXDAY, 2012/08/15, I.3 ). EP Exam priorities currently include 401(k) plans, 403(b) plans, international plans/participants, abusive transactions, governmental plans under Code Sec. 401(a) and the staggered determination letter process.
Draft Form W-8IMY. The IRS has released draft Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding (TAXDAY, 2012/08/15, I.4 ).
E-file specifications. The IRS has released the specifications for filing the following 2012 tax forms electronically through the IRS FIRE System: Form 1097; Form 1098; Form 1099; Form 3921; Form 3922; Form 5498; Form 8935; and Form W-2G (Rev. Proc. 2012-30 ; TAXDAY, 2012/08/13, I.2 ).
By Stephen K. Cooper and Jennifer J. Rodibaugh, CCH News Staff