Daily Tax Update - February 10, 2015: IRS Provides Guidance on Application of Quality Stores Decision

IRS Provides Guidance on Application of Quality Stores Decision:  Announcement 2015-08 provides guidance on the application of the Supreme Court’s holding in United States v. Quality Stores, Inc. to claims for refund of employment taxes paid with respect to severance payments.  According to the announcement, the IRS will disallow all claims for refund of Federal Insurance Contribution Act (FICA) or Railroad Retirement Tax Act (RRTA) taxes paid with respect to severance payments that do not meet the narrow exclusion of Revenue Ruling 90-72.  This position is consistent with the Supreme Court’s holding in Quality Stores and the Federal Circuit’s holding in CSX Corp. v. United States, that severance payments are both wages for FICA tax purposes and compensation for RRTA tax purposes.

G-20 Finance Ministers Support BEPS:  At a meeting in Istanbul on February 9 and 10, G20 finance ministers pledged continued support for the Base Erosion and Profit Sharing Action Plan and promised finalized deliverables by year-end.  The group also urged all jurisdictions to comply fully with the Global Forum standards on the exchange of information and to join the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

IRS Announces QZAB State Allocations for 2014:  Notice 2015-11 provides the maximum amount of Qualified Zone Academy Bonds (QZABs) that may be issued for each state for the calendar year 2014 under Section 54E(c)(2).