Daily Tax Update - August 26, 2015: IRS Proposes Increased Flexibility in Rules for Determining Bona Fide Residency in US Territories

IRS Proposes Increased Flexibility in Rules for Determining Bona Fide Residency in U.S. Territories:  Today the IRS released proposed amendments to the regulations for determining whether an individual is a bona fide resident of a U.S. territory.  Under the proposed amendments, an individual would be considered constructively present in the relevant U.S. territory for up to 30 days during which the individual is outside of both the United States and the relevant U.S. territory.  Certain exceptions would apply.  


IRS Releases Proposed, Final, and Temporary Regulations Under Section 199:   Today the IRS released proposed regulations involving the domestic production activities deduction under section 199.  The proposed rules provide guidance on such issues as determining domestic production gross receipts, allocating cost of goods sold, and certain defined terms.  Additionally, the IRS issued final and temporary regulations (TD 9731) clarifying how taxpayers should calculate Form W-2 wages for purposes of the W-2 wage limitation in the case of a short taxable year or an acquisition or disposition of a trade or business during the taxable year.  


Penalties Double for Failure to File New IRS Information Returns Under the ACA: Penalties for failure to satisfy the complex IRS filing requirements resulting from the Affordable Care Act (ACA) have just doubled.  With filing deadlines approaching, employers should act quickly to ensure they are prepared.  Starting in February 2016, the ACA requires employers and healthcare providers to file new IRS information returns in connection with employer-provided healthcare coverage, and provide a copy of the applicable return to each employee.  To read more click here.