Updated Form W-8BEN-E; Form 1127 & Revenue Procedure 99-50 Req. for Comment

Below is our summary of key Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 11, 2021 through October 15, 2021. For more information on the tax implications of COVID-19, please visit our resource page here.

October 12, 2021: The IRS issued a notice announcing that the U.S. Department of the Treasury and the IRS intend to amend the Section 987 regulations to postpone the effective date of certain final regulations for an additional year . The deferred regulations apply to tax years beginning after December 7, 2022. For taxpayers with calendar years, the final regulations from 2016 and the corresponding final regulations from 2019 apply to the tax year beginning January 1, 2023. The IRS and the Treasury Department do not intend to change the date of application of Treasury Regulation Section 1.987-12.

October 13, 2021: The IRS released an updated Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) Form and related instructions.

October 14, 2021: The IRS and the Treasury Department issued a Notice and Request for Comment on the assumption of partner debt. The regulations relate to the assumption of certain fixed and conditional obligations by a partnership in connection with the issuing of shares in partnerships as well as to § 358 (h) for the assumption of liabilities by corporations of shareholders and partnerships and temporary regulations for the assumption of certain liabilities according to Section 358 (h). Written comments are due by December 13, 2021.

October 14, 2021: The IRS and the Treasury Department issued a notice and a request for comment on Form 1127 (Request Extension of Deadline for Paying Taxes Due to Unreasonable Hardship). Written comments are due by December 13, 2021.

October 14, 2021: The IRS and Treasury Department issued a notice and solicitation request on Revenue Procedure 99-50, which in certain post-merger situations allows for combined information reporting by a subsequent business entity (i.e., a corporation, partnership, or sole proprietorship) or a Takeover. Written comments are due by December 13, 2021.

October 15, 2021: The IRS releases draft instructions for Form 8949 (Sales and Other Disposals of Capital Assets). The updated form reflects the reporting for Section 1061, which concerns the re-characterization of certain long-term capital gains from a partner holding one or more applicable equity interests as short-term capital gains.

October 15, 2021: The IRS issued a press release updating its process for certain frequently asked questions (FAQs) about newly enacted tax laws. The IRS is updating this process to address concerns about transparency and the potential impact on taxpayers when the FAQs are updated or revised. The IRS also raises concerns about the possible application of penalties to taxpayers who rely on FAQs by providing clarity on whether they can rely on FAQs to protect them from penalties. The IRS stated that important FAQs on newly enacted tax laws and any subsequent updates or revisions to the FAQs will be announced in a press release and published in a separate factsheet on IRS.gov.

October 15, 2021: The IRS publishes its weekly list of written determinations (e.g. Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).

Special thanks to Robbie Alipour at our Chicago office for this week’s roundup.