The IRS has issued proposed regulations that would revise Reg. §1.213-1 to allow medical deductions in certain cases for payments for direct primary care arrangements and healthcare sharing ministry memberships.[1]

The preamble states:

…[T]he Treasury Department and the IRS propose that expenditures for direct primary care arrangements and health care sharing ministry memberships are amounts paid for medical care as defined in section 213(d), and that amounts paid for those arrangements may be deductible medical expenses under section 213(a). The proposed regulations also clarify that amounts paid for certain arrangements and programs, such as health maintenance organizations (HMO) and certain government-sponsored health care programs, are amounts paid for medical insurance under section 213(d)(1)(D).[2]

The Tax Cuts and Jobs Act limited like-kind exchanges under §1031 to exchanges of real property effective January 1, 2018. The IRS has issued proposed regulations, [1] upon which taxpayers may rely,[2] to implement these revisions in §1031.

In Notice 2020-42[1] the IRS has provided relief from a physical presence requirement for spousal and other qualified retirement plan related consents in recognition of the COVID-19 emergency. The purpose of the notice is described as follows:

In response to the unprecedented public health emergency caused by the Coronavirus Disease 2019 (COVID-19) pandemic, and the related social distancing that has been implemented, this notice provides temporary relief from the physical presence requirement in Treasury Regulations § 1.401(a)-21(d)(6) for participant elections required to be witnessed by a plan representative or a notary public, including a spousal consent required under § 417 of the Internal Revenue Code (Code). While this temporary relief, which covers the period from January 1, 2020, through December 31, 2020, is intended to facilitate the payment of coronavirus-related distributions and plan loans to qualified individuals, as permitted by section 2202 of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. 116-136, 134 Stat. 281 (2020) (CARES Act), the temporary relief applies to any participant election that requires the signature of an individual to be witnessed in the physical presence of a plan representative or notary.[2]

The IRS, in releasing the drafts for the 2019 Form 1065 and related instructions, indicated that all partnerships would have to provide information on tax basis capital accounts on Schedules K-1 prepared for 2019 and later years. The IRS in the end decided to remove the requirement from the 2019 Form 1065 Schedule K-1s after receiving a number of comments indicating that providing that information would be very difficult or impossible for many partnerships. The agency indicated that it would be providing additional information on the calculation of partner tax capital.

In Notice 2020-43[1] the IRS indicated the agency had decided that, in lieu of providing that information the agency would propose to offer two proposed methods for partnerships to comply with the tax capital reporting requirement. The agency is using the notice to request comments on these proposed methods.

Guidance has been posted on the IRS website in the form of questions and answers regarding the carryback of net operating losses for corporations under the CARES Act into years when the alternative minimum tax (AMT) was still in force.[1]

The Tax Cuts and Jobs Act (TCJA) repealed the corporate alternative minimum tax beginning in 2018 and removed the ability for taxpayers to carry losses from 2018 back into 2017 and earlier years. However, when the CARES Act added a provision allowing net operating losses from 2018-2020 to be carried back five years, these losses from years when the AMT no longer applied were being carried back to years when the AMT still applied to taxpayers. So what was the alternative tax net operating loss (ATNOL) for these years to carry back to those earlier years?

The IRS announced in a news release[1] that later this summer the agency will begin accepting Form 1040-X, Amended U.S. Individual Income Tax Return, electronically. However, the agency did not announce a specific date for the availability of this option.

The electronic filing option will initially be limited to amendments of 2019 individual returns, as the news release states:

When the electronic filing option becomes available, only tax year 2019 Forms 1040 and 1040-SR returns can be amended electronically. In general, taxpayers will still have the option to submit a paper version of the Form 1040-X and should follow the instructions for preparing and submitting the paper form. Additional enhancements are planned for the future.[2]

Many employers offer some form of stock-based compensation to employees. In AM-2020-004[1] the IRS has issued guidance related to the computation of payroll and withholding taxes on certain types of such compensation, as well as the timing of payroll tax deposits related to such compensation.

The guidance deals with three different programs:

• Nonqualified stock options

• Stock-settled stock appreciation rights (SARs)

• Stock-settled restricted stock unit (RSU)

There actually are tax developments other than COVID-19 issues. The first set of inflation adjusted numbers have arrived for 2021.

The inflation adjusted numbers for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2021 have been released by the IRS in Revenue Procedure 2020-32.[1]