Last week, Kimberly Schoenbacher, the Acting Director of Field Operations for the LB&I Foreign Payments Practice (“FPP”), sent a message to taxpayers who may be noncompliant with Chapter 3 and FATCA withholding and reporting: the IRS is actively honing in
Tax Withholding & Reporting
The Tax Withholding & Reporting blog, published by Covington & Burling LLP, focuses on developments and guidance related to tax withholding obligations and reporting requirements under U.S. federal tax law. It covers topics such as IRS regulations on compensation deduction limitations for publicly held corporations, tax treatment of contributions and benefits under state paid family and medical leave programs, withholding rules for retirement plan distributions to U.S. taxpayers abroad, and tax implications of employer-provided work-life referral services. The blog addresses regulatory updates, compliance considerations, and practical implications for employers, employees, and payors in various withholding and reporting contexts.
Latest from Tax Withholding & Reporting - Page 11
Draft 2020 Form W-4 Addresses Some Privacy Concerns
On May 31, the IRS released a draft 2020 Form W-4 that addresses some, but not all, of the privacy concerns that led the IRS to abandon the redesigned form for 2019. According to an accompanying news release,…
IRS Legal Memo Addresses Payroll Compliance when Employer Appoints Agent in the Middle of Calendar Year
On May 31, the IRS released a legal memorandum, ILM 201922026, regarding the information return obligations of a common law employer when it appoints a pay agent in the middle of a calendar year. In general, an employer may…
Proposed 3405 Withholding Regulations Three Decades in the Making
In 1987, the IRS released Notice 87-7 providing guidance on whether certain recipients of payments from employer deferred compensation plans, individual retirement plans, and commercial annuities are subject to federal income tax withholding under section 3405. The notice provided that:…
Final CPEO Rules Signal Loosened Bond Requirements, Clarify Other Provisions
On May 23, the IRS and Treasury released final regulations governing certified professional employer organizations (“CPEOs”). CPEOs were created by the Tax Increase Prevention Act of 2014, P.L. 113-295, which added new Code sections 3511 and 7705 that contain certification…
Tax Court Reverses Course on TFRP after Remand from Eleventh Circuit
On remand from the Eleventh Circuit, the Tax Court, in Romano-Murphy v. Comm’r, determined that the failure of the IRS to provide a pre-assessment appeals hearing invalidated the IRS’s assessment of trust fund recovery penalty under section 6672 and…
TIGTA Chides IRS for Lax Non-Payroll Withholding Enforcement
The Treasury Inspector General for Tax Administration released a partially redacted report on May 20 asserting that the IRS has failed to take steps to address nearly $2 billion in discrepancies between withholding reported on withholding tax returns and withholding…
Is a Circuit Split Brewing over FBAR Willfulness Penalties?
A question appears at the bottom of Schedule B (Interest and Dividend Income) of the Form 1040 (U.S. Individual Income Tax Return) that asks individual taxpayers if during the taxable year they had any interest in or signature or other…
Justice Department Announces Employment Tax Enforcement Actions
Consistent with its ongoing employment tax enforcement efforts, the Justice Department recently announced developments in two cases involving the failure to properly withhold and remit federal employment taxes from employee wages.
On April 25, the Justice Department announced that…
IRS Issues PLR on Form 1099-C Reporting
On April 26, 2019, the IRS released PLR 201917002 concluding that an entity’s extension of credit, incidental to its sale of nonfinancial goods or performance of nonfinancial services, would not create an obligation under section 6050P to file a Form…