Daily Tax Update - September 15, 2015: IRS Issues Revenue Procedure on Fifty Percent Additional First-Year Depreciation Deduction

IRS Issues Revenue Procedure on Fifty Percent Additional First-Year Depreciation Deduction:  Today, the IRS issued Revenue Procedure 2015-48, which provides guidance with respect to certain changes to the Code made by the Tax Increase Prevention Act of 2014 (TIPA).  The guidance addresses amendments to section 168(k) that extended the placed-in-service date for property to qualify for the 50% additional first-year depreciation deduction.  The guidance also addresses the amendment to section 168(k)(4) allowing corporations to elect not to claim the 50% additional first-year depreciation deduction for certain property placed in service generally after December 31, 2013, and before January 1, 2015, and instead to increase their alternative minimum tax (AMT) credit limitation under section 53(c).  In addition, the guidance addresses changes made by the act to extend the application of section 179(f), which allows the taxpayer to treat qualified real property as section 179 property eligible for expensing. 

IRS Notice Addresses Private Foundation Investments:  Today, the IRS today released Notice 2015-62, which confirms that, under section 4944, private foundation managers may consider the relationship between a particular investment and the foundation’s charitable purpose when exercising ordinary business care and prudence in deciding whether to make the investment.  Section 4944(a)(1) imposes an excise tax on a private foundation that invests “any amount in such a manner as to jeopardize the carrying out of any of its exempt purposes.”  Under the section 4944 regulations, an investment made by a private foundation will not be considered a jeopardizing investment if, in making the investment, the foundation managers exercise ordinary business care and prudence (under the circumstances prevailing when the investment is made) in providing for the long-term and short-term financial needs of the foundation to carry out its charitable purposes.  According to the notice, “a private foundation will not be subject to tax under section 4944 if foundation managers who have exercised ordinary business care and prudence make an investment that furthers the foundation’s charitable purposes at an expected rate of return that is less than what the foundation might obtain from an investment that is unrelated to its charitable purposes.”

IRS Issues Revenue Procedure Regarding Electronic Filing by Plan Administrators:   Yesterday, the IRS released Revenue Procedure 2015-47, which sets forth procedures for retirement plan administrators and plan sponsors who are required to file electronically Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, and Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan, to request a waiver of the electronic filing requirement due to economic hardship.

Miscellaneous Guidance:
Yesterday, the IRS released Notice 2015-61, which provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3), and the 24-month average segment rates under section 430(h)(2).  The notice also provides guidance as to the interest rate on 30-year Treasury securities under section 417(e)(3)(A)(ii)(II), as in effect for plan years beginning before 2008, and the 30-year Treasury weighted average rate under section 431(c)(6)(E)(ii)(I).