June 2022 – MSATP

MSATP is excited to introduce our new Executive Director, Giavante’ Hawkins!

Giavante’ earned a bachelor’s in Sociology at Saint Vincent College and a master’s degree in Non-Profit and Association Management at the University of Maryland University College. She has accrued considerable management and leadership experience working with various organizations, including McKinley Marketing Partners, Foundation for Excellence in Education, and American Bankers Association. She has received recognition for achieving organizational targets and growth metrics throughout her career.

In her previous role Giavante’ served as the Director of Membership Operations at the American Bankers Association. Giavante’ was responsible for the annual due’s revenue cycle capturing $45 million in annual dues, member engagement, and the day-to-day operational functions of the Membership Department.

Giavante’ enjoys spending time with her family, weightlifting, and traveling in her spare time. A native Washingtonian, Giavante’ currently resides in Anne Arundel County.

Giavante’s top priorities are to work alongside the Board of Directors to serve the members and enhance the member experience while growing a diverse and inclusive membership community.

If you would like to speak to Giavante’, you can call the office at (800) 922-9672, or email her at ghawkins@msatp.org.

IRS Expands Voice Bot Options For Faster Service, Less Wait Time | IR-2022-127

The IRS has expanded voice bot options to help eligible taxpayers easily verify their identity to set up or modify a payment plan while avoiding long wait times.

Voice bots run on software powered by artificial intelligence, which enables a caller to navigate an interactive voice response. The IRS has been using voice bots on numerous toll-free lines since January, enabling taxpayers with simple payment or notice questions to get what they need quickly and avoid waiting. Taxpayers can always speak with an English- or Spanish-speaking IRS telephone representative if needed.

For more information, click here.

Senate Finance Committee Votes Unanimously To Advance Retirement Legislation | via Wolters Kluwer IntelliConnect

The Enhance American Retirement Now (EARN) Act, the Senate version of the House-passed SECURE 2.0 Act, has cleared the Senate Finance Committee.

The bill, designed to help make it easier for Americans to save more money for retirement, contains a number of tax provisions to help people save as well as access saved funds to help in emergency situations.

It passed by a unanimous vote during a June 22, 2022 during an open executive session held by the committee. The specific legislative language was not released, but a chairman’s mark describing the bill and its intended effects was released and that was the basis for the committee vote. A section-by-section summary of the bill can be found here.

IRS Will Not Issue Letter Rulings on Whether Certain Transactions Result in Employer Reversion | via Wolters Kluwer IntelliConnect

The IRS announced it would not issue letter rulings on whether an employer reversion from a qualified plan occurred under Code Sec. 4980(c)(2) in connection with a spin-off/termination transaction that involved excess assets. A spin-off/termination transaction that involves excess assets means a transaction where (1) less than 100 percent of the assets of a defined benefit plan are spun off to another defined benefit plan sponsored or maintained by the same employer; (2) the defined benefit plan receiving the assets that have been spun off is terminated within a short period of time after receiving those assets; and (3) assets remain in the trust of the terminated defined benefit plan after all benefits are distributed to or on behalf of all participants and their beneficiaries.

Background

The IRS answers inquiries from individuals and organizations regarding their status for tax purposes and the tax effects of their acts or transactions. There are, however, areas in which the IRS will not issue rulings or determination letters.

Effective Date

This revenue procedure applies to all ruling requests pending with or received by the IRS on or after June 21, 2022.

Rev. Proc. 2022-3, I.R.B. 2022-1, is amplified.

Virginia—Multiple Taxes: Biennial Budget Legislation Containing Tax Provisions Enacted | via Wolters Kluwer IntelliConnect*

Virginia enacted biennial budget bills that contain a variety of retail sales and use, cigarette, tobacco products, and other tax provisions.

The text of the bills are available on the Virginia State Budget website.

*Access news updates by signing up for CCH Tax Aware, a complimentary benefit of being an MSATP member! Visit the perks page of your profile for information on how to sign up.

MSATP’s Executive Director, Bill Feehley, CPA, is retiring this month. We want to recognize Bill for his many years of hard work and dedication to MSATP — from being a volunteer on various committees to serving as president and now Executive Director, Bill has made a lasting impact on MSATP and will be missed. Thank you, Bill — we wish you all the best!

Administrative Releases | Comptroller of Maryland

The Maryland Comptroller has published updates to three Administrative Releases.

Administrative Release 38 on Decoupling from Federal Tax Laws. The updates include a description of More Jobs for Marylanders Act, and how the Act impacts decoupling modifications for manufacturers. The publication can be found here.
Administrative Release 43 on Corporate Apportionment of Income. This is a new release that addresses the impact of single sales factor apportionment on the special apportionment formulas for certain industries carved out in regulations. The publication can be found here.
Administrative Release 22 on Apportionment of Income Airlines. The AR has been updated to clarify that Airlines shall continue to use the apportionment formula prescribed by regulation. The publication can be found here.

Questions can be addressed to Krista Sermon at ksermon@marylandtaxes.gov.

IRS Provides Update on Backlogged Returns | via NATP

Status of unprocessed Form 1040 returns
The IRS is opening mail within normal time frames and all paper and electronic individual refund returns received prior to April 2021 have been processed if the return had no errors or did not require further review.
As of May 20, 2022, the IRS had 9.8 million unprocessed individual returns, which include returns received before 2022, and new tax year 2021 returns. Of these, 2 million returns require error correction or other special handling, and 7.8 million are paper returns waiting to be reviewed and processed. This work does not typically require the IRS to correspond with taxpayers but does require special handling by an IRS employee. In these instances, it’s taking the IRS more than 21 days to issue any related refunds; in some cases, this work could take 90 to 120 days. If a correction is made to a refundable tax credit claimed on the return, the IRS will send taxpayers an explanation.
Status of processing Form 1040-X
As of May 21, 2022, the IRS had 2.1 million unprocessed Forms 1040-X and are processing these returns in the order received. The current time frame can be more than 20 weeks instead of up to 16. The IRS requests that taxpayers don’t file a second tax return or contact the IRS about the status. Taxpayers should continue to check Where’s My Amended Return? for the most up-to-date processing status available.
Status of unemployment compensation exclusion corrections
The IRS continues to review tax year 2020 returns and process corrections for taxpayers who paid taxes on unemployment compensation to exclude the compensation from income, if the taxpayer is eligible. To date, the IRS has issued over 11.8 million refunds totaling $14.5 billion. The IRS is now concentrating on more complex returns. Some taxpayers will receive refunds, while others will have their overpayment applied to taxes due or other debts. The IRS will mail a letter to affected taxpayers to inform them of the corrections, generally within 30 days from when the corrections were completed.
Status of processing Form 941
As of May 25, 2022, the IRS had 3.7 million unprocessed Forms 941. If you filed electronically and received an acknowledgment, you don’t need to take further action other than promptly responding to any requests for information. As of May 25, 2022, the total inventory of unprocessed Forms 941-X was approximately 241,000, some of which cannot be processed until the related Forms 941 are processed. While not all these returns involve a COVID credit, the inventory is being worked at two sites (Cincinnati and Ogden) that have trained staff to work possible COVID credits.

Applicable Federal Rates for July 2022 Released (Rev. Rul. 2022-12) (Jun. 16, 2022) | via Wolters Kluwer IntelliConnect*

The IRS has released the applicable federal interest rates for July 2022. The AFRs are based on the average yield on outstanding marketable obligations of the United States government.

Annual Federal Interest Rates for July 2022

The annual interest rates are:

Short-term rate is 2.37 percent
Mid-term rate is 2.99 percent
Long-term rate is 3.22 percent

Semiannual Rates

The semiannual interest rates are:

Short-term rate is 2.36 percent
Mid-term rate is 2.97 percent
Long-term rate is 3.19 percent

Quarterly Rates

The quarterly interest rates are:

Short-term rate is 2.35 percent
Mid-term rate is 2.96 percent
Long-term rate is 3.18 percent

Monthly Rates

Finally, monthly interest rates are:

Short-term rate is 2.35 percent
Mid-term rate is 2.95 percent
Long-term rate is 3.17 percent

Code Sec. 1288(b) Rates

The Code Sec. 1288(b) interest rates, when using annual compounding, are:

Short-term rate is 1.80 percent
Mid-term rate is 2.27 percent
Long-term rate is 2.43 percent

Additionally, the Code Sec. 382 adjusted federal long-term rate is 2.43 percent and the long-term tax-exempt rate is 2.43 percent.

Code Sec. 42(b)(1) Percentage

The appropriate interest rate for the low-income housing credit is:

7.72 percent for the 70-percent present-value, low-income housing credit, and
3.31 percent for the 30-percent present-value, low-income housing credit

Code Sec. 7520 AFR

The interest rate is 3.60 percent for determining:

the present value of an annuity,
an interest for life or a term of years, or
a remainder or reversionary interest.

Blended Annual Rate for 2022

Code Sec. 7872(e)(2) blended annual rate for 2022 is 1.40 percent.

Rev. Rul. 2022-12