Issue Number:  2016-50

Inside This Issue

 

1.     Refundable Credit Due Diligence Training Now Available

2.     User Fees for IRS Installment Agreements Finalized

3.     YouTube: Individual Taxpayer Identification Numbers

4.     New Publication 5273 Outlines Steps to Take Now to Prepare for Filing Season

5.     Standard Mileage Rates for Business, Medical and Moving Announced

6.     Technical Guidance

 

1.  Refundable Credit Due Diligence Training Now Available

Congress recently expanded the Earned Income Tax Credit (EITC) due diligence requirements to include two additional refundable credits – the Child Tax Credit/Additional Child Tax Credit and the American Opportunity Tax Credit. A free IRS training course is now available in English and Spanish to help tax preparers understand and complete their due diligence requirements when applying these credits. View the tax preparer toolkit for more information.

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2.  User Fees for IRS Installment Agreements Finalized

Regulations on new user fees for IRS installment payment agreements are now final. The new fees go into effect Jan. 1. The lowest cost, lowest fee option for taxpayers needing an installment agreement is the IRS Online Payment Agreement application with payments made by direct debit. The new fee for that option is $31, down from $52. The fee for low-income taxpayers using other options to set up an installment agreement remains at $43.

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3.  YouTube: Individual Taxpayer Identification Numbers

Learn about the new procedures for getting an Individual Taxpayer Identification Number in these new videos, available in English and Spanish.

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4.  New Publication 5273 Provides Steps to Take Now to Prepare for Filing Season

Use new IRS Publication 5273, Take Steps Now for Tax Filing Season, to help your clients get ready to file their 2016 federal tax returns.

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5.  Standard Mileage Rates for Business, Medical and Moving Announced

Beginning on Jan. 1, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

·         53.5 cents per mile for business miles driven, down from 54 cents

·         17 cents per mile driven for medical or moving purposes, down from 19 cents

·         14 cents per mile driven in service of charitable organizations

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6.  Technical Guidance

Revenue Ruling 2016-29 relates to allocations of low-income housing credits to projects and clarifies that section 42(m)(1)(A)(ii) of the Code neither requires nor encourages State housing credit allocating agencies to reject the proposed development of a low-income housing project that does not obtain the approval of the locality where the project is proposed to be developed.

Notice 2016-77 relates to allocations of low-income housing credits to projects and serves as a reminder to taxpayers that a project located in a qualified census tract is not described in section 42(m)(1)(B)(ii)(III) of the Code unless the project’s development contributes to a concerted community revitalization plan.

Notice 2016-78 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3), and the 24-month average segment rates under section 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under section 431(c)(6)(E)(ii)(I). The rates in this notice reflect the application of section 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141 (MAP-21) and amended by section 2003 of the Highway and Transportation Funding Act of 2014, Public Law 113-159 (HATFA).

Notice 2016-80 contains the 2016 Required Amendments List for individually-designed qualified retirement plans. The list identifies certain changes in qualification requirements that became effective in 2016 that may require a retirement plan to be amended in order to remain qualified, and establishes the date by which any necessary amendment must be made. 

Notice 2017-04 updates and clarifies the guidance provided in prior IRS notices regarding the beginning of construction for sections 45 and 48. Specifically, the notice provides clarification regarding the extension and modification of the Continuity Safe Harbor, the prohibition against combining methods by which to satisfy the beginning of construction requirement, and the costs that may be included in the Five Percent Safe Harbor for retrofitted renewable energy facilities.

Revenue Procedure 2017-12 provides that the Internal Revenue Service (IRS) will treat an instrument described in section 3 of this revenue procedure as indebtedness for federal tax purposes.

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