Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of June 17, 2024 – June 21, 2024.

June 17, 2024: The IRS released Internal Revenue Bulletin 2024-25, which includes the following:

• Revenue Ruling 2024-12, which provides the June 2024 applicable federal rates.
• Treasury Decision 9993, which provides final regulations on the election under Internal Revenue Code (Code) 6418 to transfer eligible energy credits, effective July 1, 2024.
• Treasury Decision 9997, which reduces the cost of applying for or renewing a preparer tax identification number from $21 to $11.
• Proposed Regulations, which would remove the “associated property rule” and related rules from the regulations on interest capitalization requirements for improvements to “designated property” under Code 263A(f) and clarify the definition of “improvement” in the existing regulations.

June 17, 2024: The IRS announced the establishment of a new dedicated group within the Office of Chief Counsel that will focus on developing guidance for partnerships, specifically with respect to the use of “basis shifting” transactions by related-party partnerships.

June 17, 2024: The IRS released guidance intended to target certain transactions that use the basis adjustment provisions in Code §§ 734, 743, 754 and 755 to shift basis to depreciable property through partnership transactions. This guidance includes:

• Revenue Ruling 2024-14, which identifies three types of basis shifting transactions involving related parties that, according to the IRS, should be disallowed for lack of economic substance.
• Notice 2024-54, which announces the IRS’s intent to propose regulations under Code §§ 732, 734, 743 and 755 that, if finalized, are intended to take effect on or after June 17, 2024. The regulations would identify several types of “covered transactions” in which basis step-ups resulting from partnership transactions would be disallowed. Unlike Revenue Ruling 2024-14, these regulations would not depend on a covered transaction lacking economic substance.
• Proposed Regulation § 1.6011-18, which would identify certain partnership basis shifting transactions as “transactions of interest,” which generally must be disclosed to the IRS.

June 17, 2024: The IRS provided general tips for taxpayers benefiting from educational assistance programs under Code § 127 with respect to the treatment of certain educational expenses, qualified education loans and working condition fringe benefits.

June 17, 2024: The IRS released Notice 2024-53, which provides the 24-month average corporate bond segment rates for June 2024, yield curve and segment rates for single-employer plans and 30-year Treasury securities interest rates.

June 18, 2024: The IRS announced the release of final regulations for taxpayers who satisfy certain prevailing wage and apprenticeship (PWA) requirements regarding the construction, alteration or repair of certain clean energy facilities or properties, projects or equipment. Taxpayers who satisfy these PWA requirements are eligible for increased credit or deduction amounts for certain clean energy incentives under Code §§ 45, 45Y, 48 and 48E.

June 18, 2024: The IRS released Revenue Ruling 2024-13, which provides the July 2024 applicable federal rates.

June 20, 2024: The IRS announced plans to deny improper “high-risk” Employee Retention Credit (ERC) claims by businesses that did not follow the ERC guidelines and anticipates that payments will slowly be processed for businesses with “low-risk” claims.

June 20, 2024: The IRS released Notice 2024-55, which provides guidance on new exceptions to the additional 10% tax on early permissible retirement plan distributions under Code § 72(t)(1) for emergency personal expenses and for victims of domestic abuse, effective January 1, 2024.

June 20, 2024: The IRS outlined background facts on its mediation process, including when one may be appropriate for a taxpayer.

June 21, 2024: The IRS announced the release of draft Form 6765, Credit for Increasing Research Activities, which is available for partnerships and S corporations seeking to claim tax credits for increasing research activities, elect the reduced credit under Code § 280C, or elect to claim a credit as a payroll tax credit against the employer portion of social security taxes.

June 21, 2024: The IRS released Announcement 2024-26, which provides formal notice to the Russian Federation to confirm the suspension of paragraph 4 of Articles 1, 5-21 and 23 of the treaty between the United States and the Russian Federation, effective on August 16, 2024. The suspension will continue until otherwise decided by the two governments.

June 21, 2024: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).