Treasury and IRS Will Delay Effective Date of Several Provisions in Section 871(m) Regulations

Treasury and IRS Will Delay Effective Date of Several Provisions in Section 871(m) Regulations: Notice 2018-72 announces that Treasury and the IRS intend to amend the section 871(m) regulations to delay the effective/applicability date of certain rules in those final regulations. The Notice also extends the phase-in period provided in Notice 2017-42 and Notice 2018-5 for certain provisions of the section 871(m) regulations.

Treasury and IRS to Launch Redesigned Form W-4 in 2020: Today, Treasury announced that the IRS will implement a redesigned Form W-4, Employee’s Withholding Allowance Certificate, for tax year 2020, a timeline that will allow for continued work to refine the new approach for the form. As a result of the enactment of the Tax Cuts and Jobs Act, Treasury and the IRS are revising the wage withholding system and Form W-4. For tax year 2019, the IRS will release an update to the Form W-4 that is similar to the 2018 version currently in use. 

TIGTA Report Finds Improvements Needed to Ensure Adequate Consideration of Prior and/or Subsequent Year Returns During Examinations: A report released by the Treasury Inspector General for Tax Administration (TIGTA) summarizes the findings of an audit that was initiated to determine if IRS field examiners are reviewing prior and/or subsequent year returns as required. TIGTA determined that 34 of 103 field examination case files reviewed were not adequately expanded. Among other things, TIGTA recommended that the IRS should update the Internal Revenue Manual with additional guidance on when it is appropriate to expand an examination even though the statute of limitations on assessment expires in less than 12 months, and that the IRS should provide additional training to field examiners on when to expand examinations.

Second Circuit Issues Summary Order: Today, the US Court of Appeals for the Second Circuit issued a summary order in Campaniello v. NY State Department of Taxation and Finance. The plaintiff-appellants sought to enjoin New York from treating one of the plaintiff-appellants as a New York resident for the purpose of assessing and collecting state taxes. The Second Circuit found that it was without jurisdiction under the Tax Injunctive Act to grant plaintiff-appellants any injunctive relief because New York offered them an adequate remedy.

EU Releases Draft Legislative Resolution on Corporate Taxation of a Significant Digital Presence: The European Union (EU) has released a draft legislative resolution on the proposal for a European Council directive containing rules relating to the corporate taxation of a significant digital presence.