Author: Lily

You’re invited to “Summer Wine Tasting.” Tap here to RSVP – Paperless Post Flyer

 

Pension Relief Coming For Union Workers And Retirees | via Wolters Kluwer IntelliConnect

The Biden Administration announced it will be implementing the American Rescue Plan’s Special Financial Assistance program that will provide financial assistance to struggling multiemployer pension programs.

“Under the program, financially struggling multiemployer pension plans can apply to the PBGC [Pension Benefit Guaranty Corporation] for assistance,” a fact sheet issued July 6, 2022, by the White House states.

PBGC published July 8, 2022, in the Federal Register a final regulation detailing the mechanics of how the SFA program will distribute the $94 billion approved by Congress for this program. It is expected to help about 200 plans that otherwise would have become insolvent in the near term, denying plan participants of receiving their full pension benefits.

“This action will have a significant impact on the lives of workers and their families, and represents one of the most meaningful improvements in our nation’s retirement security in years,” Department of the Treasury Secretary Janet Yellen said in a statement. “In addition, this initiative extends the solvency of the program that insures multiemployer pensions by nearly three decades.”

The White House said multiemployer pension plans that receive funds from this program are expected to remain solvent through 2051 and beyond.

By Gregory Twachtman

Applicability of Section 432(b)(7) Following A Merger Involving Multiemployer Defined Benefit Plan Discussed (Rev. Rul. 2022-13) | via Wolters Kluwer IntelliConnect

The IRS has issued guidance on the applicability of Code Sec. 432(b)(7) following a merger involving a multiemployer defined benefit plan that has received special financial assistance. According to the Service, after a merger of a multiemployer defined benefit pension plan that has received special financial assistance (SFA) from the Pension Benefit Guaranty Corporation (PBGC) with a second multiemployer defined benefit pension plan that has not received SFA, with the second plan designated as the ongoing plan after the merger, the ongoing plan is not deemed to be in critical status under Code Sec. 432(b)(7).

Merger Between Multiemployer Defined Benefit Pension Plans

Plan A and Plan B were multiemployer defined benefit pension plans. The merger agreement between Plan A and Plan B designated Plan B as the ongoing plan for the plan years beginning on or after January 1, 2024 (the effective date of the merger) and provided that Plan B would obtain all of Plan A’s assets and assumed all of its liabilities. In accordance with the designation of Plan B as the ongoing plan, all plan-related documentation and reports with respect to all plan years beginning on or after January 1, 2024, including Form 5500, Annual Return/Report of Employee Benefit Plan, were in the name of Plan B and use Plan B’s EIN and the plan number.

Code Sec. 432(b)(7) provides for deemed critical status, applies only to an eligible multiemployer plan described in Code Sec. 432(k)(3) that applies for and receives SFA. Thus, if a multiemployer plan that is eligible for and has received SFA merges into a plan that did not receive SFA, and, under the terms of the merger, the plan that did not receive SFA is designated as the ongoing plan, that ongoing plan is not deemed to be in critical status under Code Sec. 432(b)(7). Because Plan B was not an eligible multiemployer plan described in Code Sec. 432(k)(3) that may apply for and receive SFA under section 4262 of ERISA, Code Sec. 432(b)(7) did not apply to Plan B. Accordingly, Plan B was not deemed to be in critical status pursuant to Code Sec. 432(b)(7) as a result of the merger with Plan A for the plan years beginning on or after the effective date of the merger.

IRS Webinar: Accessing IRS Online Services – Understanding the Identity Verification Process | Tuesday, July 19, 2021 @ 2 PM EST

This webinar discusses:

• Improved access to IRS online services
• What this means for e-Services users
• IRS’s new identity verification and authentication platform
• Registration overview
• Key takeaways
• Plus, a live Q&A

1 CE credit will be offered for this webinar. Category: Federal Tax

Questions? Email cl.sl.web.conference.team@irs.gov.

Register here: Accessing the IRS: Understanding the Identity Verification Process (webcaster4.com)

Gig Economy Worker’s Tax Responsibilities | IRS Tax Tip 2022-97

Gig work is taxable and must be reported as income on the worker’s tax return. Examples of gig work include:

• Driving a car for booked rides
• Selling goods online
• Renting out property
• Providing other on-demand work

Here are some things gig workers should know to stay on top of their tax responsibilities.

Changes to the e-file Application Fingerprinting Process | IRS QuickAlert

Beginning September 25, 2022, the IRS will implement a new electronic fingerprinting process for e-file applicants. Individuals will be required to use the IRS authorized vendor for fingerprinting. Each new Principal and Responsible Official listed on a new e-file application or added to an existing application needing fingerprints, must schedule an appointment with the IRS authorized vendor.

The cutoff date to mail paper fingerprint cards (Form FD-258) to the IRS is August 15, 2022. Fingerprint cards must be postmarked by August 15, 2022, and the application must be submitted prior to mailing the fingerprint cards.

The IRS will not process fingerprint cards postmarked after August 15, 2022. Customers needing fingerprints will need to wait until September 25, 2022, to schedule an electronic fingerprinting appointment. On September 25, 2022, you can schedule your appointment by accessing the scheduling link located on the e-file application summary page.

Instructions for scheduling an appointment will be provided upon submitting an e-file application and on IRS.gov. The IRS will provide additional information about the new fingerprinting process on September 25, 2022. Please continue to check the Become an Authorized e-file Provider webpage for the most up-to-date information,

Electronic Tax Administration Advisory Committee Annual Report to Congress 

The ETAAC released its annual report to Congress, featuring recommendations focused on budget support for the IRS and enhancements to e-filing. Read the report here.

Click the image below for a special message to the MSATP Community ☺️

If you would like to speak to Gigi, call (800) 922-9672 or email ghawkins@msatp.org.

 

IRS Webinar: Sale of Partnership Interest – Comprehensive Case Study | Thursday, July 14, 2022 @ 2 PM EST

This webinar will:

• Review the tax law relating to the sale of partnership interest tax issues
• Gain insight into the common sale of partnership interest tax issues by reviewing a comprehensive case study
• Explain the Service’s position with respect to the common sale of partnership interest tax issues
• Plus, a live Q & A

1 CE credit will be offered for this webinar. Category: Federal Tax

Questions? Email cl.sl.web.conference.team@irs.gov.

Register Now

IRS Increases Mileage Rate For Remainder of 2022 | IR-2022-124

The IRS announced an increase in the optional standard mileage rate for the final 6 months of 2022. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes.

For the final 6 months of 2022, the standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year. The new rate for deductible medical or moving expenses (available for active-duty members of the military) will be 22 cents for the remainder of 2022, up 4 cents from the rate effective at the start of 2022. These new rates become effective July 1, 2022. The IRS provided legal guidance on the new rates in Announcement 2022-13.

Taxpayers Now Have More Options to Correct, Amend Returns Electronically | IR-2022-130

The IRS announced that more forms can now be amended electronically. These include people filing corrections to the Form 1040-NR, U.S. Nonresident Alien Income Tax Return and Forms 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico) and Forms 1040-PR, Self-Employment Tax Return – Puerto Rico.

Read more here.

Here’s What Businesses Need to Know About the Enhanced Business Meal Deduction | IRS Tax Tip 2022-91

The IRS encourages businesses to begin planning now to take advantage of tax benefits available to them when they file their 2022 federal income tax return. This includes the enhanced business meal deduction.

For 2021 and 2022 only, businesses can generally deduct the full cost of business-related food and beverages purchased from a restaurant. Otherwise, the limit is usually 50% of the cost of the meal.

Read more here about who qualifies for the enhanced deduction.

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 *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.