Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 11, 2023 – December 15, 2023.

December 11, 2023: The IRS released Internal Revenue Bulletin 2023-50, which includes the following:

• Proposed regulations that would update regulations under Internal Revenue Code (Code) §§ 267 and 707 to apply an entity approach to partnerships for purposes of applying loss limitation rules to related persons. The proposed regulations are intended to conform the existing regulations to current law. Comments and requests for a public hearing must be received by February 26, 2024.
   
• Proposed regulations that relate to the calculation of foreign currency gains and losses under Code § 987. The proposed regulations include a current rate election, which would treat all balance sheet items as marked items and would require that income, gain, loss, and deduction with respect to a qualified business unit be translated at a yearly average exchange rate. The proposed regulations also include an annual recognition election, which would trigger all items of income, gain, loss, and deduction on an annual basis. Comments and requests for a public hearing must be received by February 12, 2024.

December 11, 2023: The IRS issued Notice 2023-80, which announces the intention to issue proposed regulations that address the application of the foreign tax credit (FTC) and dual consolidated losses in relation to the Global Anti-Base Erosion (GloBE) Model Rules. The notice also (i) extends the temporary relief period described in Notice 2023-55 for determining whether a foreign tax is eligible for an FTC pursuant to §§ 901 and 903 and (ii) addresses application of the temporary relief with respect to partnerships and their partners.

December 11, 2023: The IRS urged taxpayers to take certain important actions to help them file their 2023 federal income tax return for the upcoming filing season, including (i) making quarterly payments by January 16, 2024, if required, (ii) gathering 2023 tax documents, (iii) considering whether to file electronically and choosing direct deposit to expedite tax refunds, and (iv) reviewing energy-related credits. The IRS also reminded taxpayers that they can now view their IRS account transcripts online and should not rely on receiving refunds by a certain date.

December 13, 2023: The IRS announced plans for a new leadership structure at the agency that will feature a single deputy IRS Commissioner and four new IRS chief executive positions to cover taxpayer service, compliance, information technology and operations.

December 13, 2023: The IRS published Tax Tip 2023-126, which states that business taxpayers can electronically file any Form 1099 series information returns for free with the IRS Information Returns Intake System.

December 14, 2023: The US Department of the Treasury and the IRS issued proposed regulations on the § 45X advanced manufacturing production credit. The proposed regulations would provide rules for the production of eligible components and sale to unrelated and related persons, including the rules for a taxpayer to make an election to treat sales of eligible components to related persons as if made to unrelated persons. Guidance would also be provided on definitions of eligible components, credit calculation, and specific recordkeeping and reporting requirements. Comments must be received by February 13, 2024.

December 14, 2023: The IRS issued the 2024 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Further details are provided in Notice 2024-08.

December 14, 2023: The IRS published Tax Tip 2023-127, which reminds taxpayers that the selection of a reputable tax preparer is vital to tax security.

December 14, 2023: The IRS released Notice 2024-04, which updates the corporate bond monthly yield curve and corresponding spot segment rates for December 2023 used under § 417(e)(3)(D), the 24-month average segment rates for December 2023 and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

December 15, 2023: The Treasury and the IRS issued Notice 2024-06, which provides additional guidance on the Sustainable Aviation Fuel credit pursuant to §§ 40B and 6426(k).

December 15, 2023: The Treasury and the IRS issued Notice 2024-10, which provides rules for the corporate alternative minimum tax and determining the adjusted financial statement income of a US shareholder when a controlled foreign corporation (CFC) pays a dividend to that US shareholder or another CFC. Notice 2024-10 also modifies and clarifies rules in Notice 2023-64 for determining the applicable financial statement of a corporation that is included in a consolidated tax return.

December 15, 2023: The IRS reminded taxpayers who did not pay enough tax in 2023 to make a fourth quarter tax payment on or before January 16, 2024, to potentially avoid a possible penalty or tax bill.

December 15, 2023: The IRS issued Revenue Ruling 2024-02, which provides the applicable federal rates (AFRs) for January 2024. The January 2024 AFRs reflect a significant decrease from the December 2023 AFRs.

December 15, 2023: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Special thanks to John Zhang in our New York office for this week’s roundup.