Tuesday, December 21, 2010

Technical Guidance

Announcement 2010-96 announces the release of Form 8944, Preparer e-file Hardship Waiver Request, which tax return preparers who meet the definition of a specified tax return preparer and who believe they may qualify for an undue hardship waiver may begin to use to voluntarily submit an undue hardship waiver request to the IRS now. Preparers must use Form 8944 to voluntarily request a waiver; they are encouraged to submit their requests as soon as possible, although approval of the requests will not occur prior to the publication of final regulations and a final revenue procedure, which is expected in early 2011.

Notice 2010-82 provides guidance on the small employer tax credit under section 45R.

Notice 2010-85 provides guidance to specified tax return preparers regarding the format and content of requests for waiver of the magnetic media (electronic) filing requirement due to undue hardship.

Notice 2010-87 provides transitional relief for determining the timeliness of Federal tax deposits (FTDs) under section 6302 of the Internal Revenue Code. The notice provides that the Internal Revenue Service will not assert penalties under Code section 6656 for FTDs due in calendar year 2011 that are untimely solely because the depositor treated a statewide legal holiday as if it were a legal holiday in the District of Columbia.

Notice 2010-88 provides the 2011 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) plan.

Notice 2010-92 addresses the application of section 909 to foreign income taxes paid or accrued in taxable years of a section 902 corporation beginning on or before December 31, 2010. The Education Jobs and Medicaid Assistance Act ("EJMAA"), enacted on August 10, 2010 (P.L. 111-226, 124 Stat. 2389 (2010)), added section 909 to the Code to address situations where foreign income taxes have been separated from the related income. Section 909(a) provides that if there is a foreign tax credit splitting event with respect to a foreign income tax paid or accrued by a taxpayer, such tax shall not be taken into account for federal tax purposes before the taxable year in which the related income is taken into account by the taxpayer.

Notice 2010-93 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under §412(b)(5)(B)(ii)(II) of the Internal Revenue Code. It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under §430(h)(2). In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under §417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, and the minimum present value segment rates under §417(e)(3)(D) as in effect for plan years beginning after 2007.

Revenue Procedure 2010-51 revenue procedure updates Rev. Proc. 2009-54, 2009-51 I.R.B. 930, and provides rules for using optional standard mileage rates in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.

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