Guidance Implements Termination of Employee Retention Credit and 4 more topics! Nichols’ Tax Update, Issue 21-49

Nichols’ Tax Update, Issue 21-49

1. IRS Advises on Calculating Imputed Underpayments of Partnerships
   • In emailed advice, the IRS advised on whether adjustments to partnership-related items are included in the calculation of the partnership’s imputed underpayment.  [ECC 202148006, 12/3/2021]
2. Guidance Implements Termination of Employee Retention Credit
   • The IRS has issued guidance (Notice 2021-65) to reflect that employers, other than recovery start-up businesses, are no longer entitled to the employee retention credit for wages paid on or after October 1. [Notice 2021-65, 12/6/2021]
3. Partnership Challenges Net Earnings Adjustments in Tax Court
   • A partnership petitioned the Tax Court challenging a notice of final partnership administrative adjustment, arguing that the IRS erred by adjusting its net earnings from self-employment for the 2015 and 2016 tax years and by determining that the partnership’s individual partners are not limited partners. [Sirius Solutions LLLP et al. v. Commissioner; No. 30118-21, (9/20/2021) 12/7/2021]
4. Treasury Issues Proposed Regs on Beneficial Ownership
   • Treasury’s Financial Crimes Enforcement Network December 8 announced proposed regulations implementing the Corporate Transparency Act, which would require certain business entities to report beneficial ownership information. 188 pages ! ! ! ! ! ! ! [FR Doc. 2021-26548 Filed: 12/7/2021 11:15 am; Publication Date: 12/8/2021]
5. Civil Fraud Penalty on the Line in Tax Court Easement Petitions
   • The IRS has asserted a 75 percent civil fraud penalty in nine new Tax Court petitions challenging nearly $365 million in denied conservation easement deductions. [Tax Notes Today, 12/8/2021, article by Kristen Parillo]