Five-Minute Tax Briefing: August 2, 2022
Unredacted Record in Whistleblower Suit: A whistleblower provided information to the IRS
regarding three target taxpayers. The IRS initiated actions against the taxpayers and
collected proceeds, but the Whistleblower Office denied the accuser’s claim for an award
under IRC Sec. 7623(b). The whistleblower petitioned the Tax Court for review. The IRS was
®ordered to file with the court redacted and unredacted copies of the administrative record,
including returns and return information of the target taxpayers. The IRS filed a redacted
copy of the administrative record and requested that the court excuse it from filing an
unredacted copy to protect IRC Sec. 6103 information.
Five-Minute Tax Briefing: July 19, 2022
OIC Rejected on File Closure Date: If an Offer in Compromise (OIC) is not rejected within 24 months
of submission, it is “deemed to be accepted” under IRC Sec. 7122(f) . In April 2018, at the outset of a
Collection Due Process (CDP) hearing, Mr. Brown submitted an OIC related to his $50 million tax
liability. In November 2018, the IRS closed the OIC file and returned it to Mr. Brown because “ther
investigations are pending that may affect the liability sought to be compromised or the grounds upon
which it was submitted.” In August 2020, the IRS issued a notice of determination sustaining the
collection action. Mr. Brown filed a motion for summary judgment contending that his OIC was deemed
accepted based on the date of the notice of determination.
Five-Minute Tax Briefing: July 5, 2022
Application of Present-value Concepts and Estate Deductions:The IRS has released proposed
regulations (REG-130975-08) on the proper use of present-value principles in determining the amount
deductible by an estate for funeral expenses, administration expenses, and certain claims against the
estate under IRC Sec. 2053 . In addition, the proposed regulations provide guidance on the
deductibility of interest expense accruing on tax and penalties owed by an estate, and interest expense
accruing on certain loan obligations incurred by an estate. The proposed regulations also amend and
clarify the requirements for substantiating the value of a claim against an estate that is deductible in
certain cases and provide guidance on the deductibility of amounts paid under a decedent’s personal
guarantee.
Five-Minute Tax Briefing: June 21, 2022
IRS Increases Mileage Rate: In recognition of recent gasoline price increases, the optional standard
mileage rate for the final six months of 2022 has been increased. Taxpayers may use the optional
standard mileage rates to calculate the deductible costs of operating an automobile for business and
certain other purposes. For the final six months of 2022, the standard mileage rate for business travel
will be 62.5 cents per mile, up four cents from the rate effective at the start of the year. The new rate for
deductible medical or moving expenses (available for active-duty members of the military) will be 22
cents for the remainder of 2022, up four cents from the rate effective at the start of 2022.
Five-Minute Tax Briefing: June 07, 2022
IRS Releases 2021 Data Book: The IRS has released its 2021 Data Book which summarizes agency
activity for fiscal-year 2021 (10/1/20-9/30/21). During Fiscal Year (FY) 2021, IRS employees processed
more than 261 million tax returns and other forms, including 167.9 million individual income tax returns,
an increase of 6.8% from FY 2020. Electronically filed individual returns accounted for 90% (151.1
million) of these. More than 12.2 million business returns were filed, an increase of 7.7% over the prior
year. Knowing the difficulties of providing immediate assistance in person or on the phone to many
customers, the IRS educated taxpayers about tools and guidance available at IRS.gov . Website usage
was nearly two billion site visits in FY 2021, up 24.7% from last year’s numbers. The IRS had close to
632.4 million inquiries on the “Where’s My Refund?” online tool. An electronic version of the Data Book
can be found at www.irs.gov/pub/irs-pdf/p55b.pdf . News Release IR-2022-111 .
Social Security Wage Base Increased for 2022
The Social Security Administration (SSA) has announced that the maximum earnings subject to the Social Security component of the FICA tax will increase from $142,800 to $147,000 for 2022. This means that for 2022, the maximum SocialSecurity tax that employers and employees will each pay is $9,114.00 ($147,000 x 6.2%).
Application of Certain Extensions under COBRA
The IRS released clarification of the application of certain extensions of timeframes related to elections and payments of theConsolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) premiums during the COVID-19 national emergency.
Tax Relief for Victims of Hurricane Ida in Mississippi
The IRS has provided tax relief forindividuals and households affected by Hurricane Ida in all 82 Mississippi counties and theMississippi Choctaw Indian Reservation. The relief postpones various tax filing and paymentdeadlines that occurred beginning on 8/28/21.
Procedures for Revoking a Section 754 Election
The IRS has provided its employees with updated procedures to use when determining whether to approve or deny a partnership’s request to revoke its Section 754 election to adjust partnership property basis.
2021 Vehicle Depreciation Limits
The IRS has released the Section 280F depreciation deduction limits for passenger autos (including trucks and vans) first placed in service during 2021.For passenger autos acquired after 9/27/17, placed in service during 2021, and subject to bonus depreciation under IRC Sec. 168(k), the depreciation limits are $18,200 for the first year, $16,400for the second year, $9,800 for the third year, and $5,860 for each succeeding year.
