Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 10, 2022 – October 14, 2022. 

October 11, 2022: The IRS released Internal Revenue Bulletin 2022-41, which highlights the following:

• Notice 2022-42: This notice announces that the IRS and the US Department of the Treasury (Treasury) intend to amend the regulations under Section 901 with respect to the application of the noncompulsory payment regulations to certain amended Puerto Rico tax decrees.

• Notice 2022-44: This notice provides annual awareness of the 2022-2023 special per diem rates for taxpayers to use when substantiating the amount of business expenses incurred while traveling away from home. The guidance addresses (1) the special transportation industry meal and incidental expenses rates, (2) the rate for the incidental expenses only deduction and (3) the rates and list of high-cost localities for purposes of the high-low substantiation method.

• Revenue Procedure 2022-19: This revenue procedure provides guidance to allow S corporations and their shareholders to resolve frequently encountered issues with certainty and without requesting a private letter ruling issued by the IRS.

October 11, 2022: The IRS issued Notice 2022-41, which expands the application of permitted change-in-status rules for health coverage under a Section 125 cafeteria plan. This guidance addresses when a plan participant may want to revoke the employee’s election under the cafeteria plan for family coverage under a group health plan (other than a flexible spending arrangement) in order to allow one or more family members to enroll in a Qualified Health Plan through a Health Insurance Exchange in the individual market.

October 11, 2022: The IRS announced that seminars from the 2022 IRS Nationwide Tax Forum are now available online. The platform offers 18 self-study seminars, including ones on the following topics:

• IRS Commissioner Chuck Rettig’s Keynote Address

• Tax Law Changes for Tax Year 2022 – in English and Spanish

• Professional Responsibility Obligations (Ethics) – in English and Spanish

• Tax Treatment of Digital Assets

• Tax-Exempt Organizations Update

• Emerging Cyber Crimes – in English and Spanish

October 11, 2022: The IRS announced that it is expanding dyed diesel penalty relief in response to Hurricane Ian. The IRS will not impose a penalty when dyed diesel fuel with a sulfur content that does not exceed 15 parts-per-million is sold for use or used on highways in the state of Florida. The relief began on September 28, 2022, and lasts through October 19, 2022. The penalty relief previously only applied to emergency vehicles.

October 11, 2022: The IRS issued a statement related to uncertain tax positions (UTP) reporting. Draft changes to the Schedule UTP and the UTP instructions are available at Draft Task Forms. The draft changes are intended to improve the form’s usefulness by incorporating additional relevant examples and enhanced guidance. For further discussion, see our prior post.

October 11, 2022: The IRS issued Tax Tip 2022-155, warning people to be on the lookout for scams that put sensitive tax data at risk. So far in 2022, the IRS has identified thousands of fraudulent domains linked to multiple text scams. IRS-themed scams have increased significantly.

October 12, 2022: The IRS reminded taxpayers that the deadline to file their 2021 tax return on extension is October 17. The IRS received about 19 million requests for extensions. IRS Free File will remain open for an extra month, until November 17, 2022, for those who still need to file their taxes.

October 13, 2022: The IRS issued Tax Tip 2022-157, highlighting the reasonable accommodations available to taxpayers with disabilities.

October 13, 2022: The IRS is requesting comments on Form 14234, Compliance Assurance Process (CAP) Application and sub-forms A, B, C, D. CAP is a voluntary program available to Large Business and International Division taxpayers who meet certain criteria, providing a review of certain business transactions.

October 13, 2022: The IRS issued final regulations under Section 36B regarding eligibility for the premium tax credit. Under Treasury Decision 9968, employer-sponsored minimum essential coverage for family members of an employee is determined based on the employee’s share of the cost, not the cost of covering only the employee. The final regulations also add a minimum value rule for family members based on the benefits provided to the family members.

October 13, 2022: The IRS updated a reminder that October 15 is the extension deadline for taxpayers to file their annual Report of Foreign Bank and Financial Accounts (FBAR). However, filers affected by a natural disaster in Puerto Rico, Florida, North Carolina and South Carolina may have their FBAR due date further extended.

October 13, 2022: The IRS announced that it will start sending letters to more than nine million individuals and families who may have qualified for a variety of tax benefits but did not claim them by filing a 2021 federal income tax return. The letters are going to people who appear to qualify for the Child Tax Credit, Recovery Rebate Credit or Earned Income Tax Credit. IRS Free File will remain open for an extra month, until November 17, 2022, to help people claim the benefits.

October 14, 2022: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).

Upcoming Events:

• The 28th Annual Tax Practitioner and IRS Fall Seminar is scheduled for October 26, 2022, at 10:00 am (CDT). Topics include IRS Operations, Federal Ethics, Tax Pro Account, Offer In Compromise and Estate and Gift Tax.

• The IRS’s Taxpayer Advocacy Panel will hold the following committee meetings in November:

  • November 8, 2022: Notices and Correspondence Project Committee

  • November 8, 2022: Tax Forms and Publications Project Committee

  • November 8, 2022: Toll-Free Phone Lines Project Committee

  • November 9, 2022: Special Projects Committee

  • November 9, 2022: Taxpayer Communications Project Committee

  • November 10, 2022: Assistance Center Improvements Project Committee

  • November 17, 2022: Taxpayer Advocacy Panel Joint Committee

Special thanks to Sarah Raben in our Chicago office for this week’s roundup.