Daily Tax Update - July 29, 2016: IRS Releases Proposed Rules Relating to Information Reporting of Catastrophic Health Coverage

IRS Releases Proposed Rules Relating to Information Reporting of Catastrophic Health Coverage:  Today the IRS released proposed regulations clarifying when employers must report information relating to minimum essential coverage under section 6055.  Health insurance issuers, certain employers, and others that provide minimum essential coverage to individuals must report to the IRS information about the type and period of coverage and furnish related statements to covered individuals.  Under the proposed rules, (1) except for coverage under a catastrophic plan, a health insurance issuer is not required to file a return or furnish a report for coverage in a qualified health plan in the individual market enrolled in through an affordable insurance exchange; (2) if an individual is covered by more than one minimum essential coverage plan or program provided by the same reporting entity, reporting is required for only one of the plans or programs; and (3) reporting is not required for an individual’s minimum essential coverage to the extent that the individual is eligible for that coverage only if the individual is also covered by other minimum essential coverage for which section 6055 reporting is required.

IRS Proposes Rules for Reporting Qualified Tuition and Related Expenses:  The IRS released proposed regulations that revise the rules for reporting qualified tuition and related expenses under section 6050S on a Form 1098=T, “Tuition Statement,” and conforms the regulations to the changes made to section 6050S by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act).  The proposed rules also seek to amend the regulations on the education tax credits under section 25A to conform the regulations to changes made to section 25A by the Trade Preferences Extension Act of 2015 and the PATH Act.  

Miscellaneous Guidance:
Announcement 2016-27 provides guidance to jurisdictions that are treated as if they have an intergovernmental agreement (IGA) in effect and foreign financial institutions (FFIs) located in those jurisdictions.  The announcement states that by December 31, each jurisdiction that is treated as if it has an IGA in effect and that wishes to continue to be treated as if it has an IGA in effect must provide Treasury with a detailed explanation of why the jurisdiction has not yet brought the IGA into force and provide a step-by-step plan that the jurisdiction intends to follow in order to sign the IGA (if it has not been signed) and bring the IGA into force.