Overview
IRS, Treasury Issue Guidance on Previously Taxed Earnings and Profits: Notice 2019-1 announces that the Treasury Department and IRS intend to issue regulations addressing certain issues arising from the enactment of the Tax Cuts and Jobs Act, Pub. L. 115-97, with respect to foreign corporations with previously taxed earnings and profits (PTEP). The notice describes regulations that Treasury intends to issue including (i) rules relating to the maintenance of PTEP in annual accounts and within certain groups; (ii) rules relating to the ordering of PTEP upon distribution and reclassification; and (iii) rules relating to the adjustment required when an income inclusion exceeds the earnings and profits of a foreign corporation. It is anticipated that the regulations announced in the notice will apply to taxable years of US shareholders ending after the date of release of the notice and to taxable years of foreign corporations ending with or within such taxable years.
IRS Announces Credit Phase-Out for Tesla Plug-in Electric Vehicles: Notice 2018-96 announces the credit phase-out schedule for new qualified plug-in electric drive motor vehicles sold by Tesla, Inc. The IRS announced today that, through the third quarter of 2018, on a cumulative basis, Tesla has sold more than 200,000 vehicles eligible for the plug-in electric drive motor vehicle credit. This triggers a phase out of the tax credit available for purchasers of new Tesla plug-in electric vehicles beginning Jan. 1, 2019.
Miscellaneous Guidance Released:
Notice 2019-02 provides the optional standard mileage rates for 2019 for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. The notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.
Notice 2019-03 provides the required monthly update of the interest rates used for pension plan funding purposes, and for purposes of determining minimum present values of pension plan distributions.