Daily Tax Update - February 9, 2012: IRS Issues Temporary Regs on Foreign Tax Credit Splitting Events

IRS ISSUES TEMPORARY REGS ON FOREIGN TAX CREDIT SPLITTING EVENTS:  Late this afternoon, the IRS issued temporary regulations (T.D. 9577) on foreign tax credit splitting events under section 909.  Effective February 14, 2012, the text of the temporary regs also serves as the text of simultaneously released proposed regulations (REG-132736-11).  

IRS RELEASES INFORMATION ON VETERANS TAX CREDIT:  Today, the IRS released guidance and forms that employers can use to claim the tax credit for hiring veterans.  The IRS also announced that employers will have more time to file the required certification form for employees hired on or after November 22, 2011, and before May 22, 2012.

  • According to the IRS, "The credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations.  The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, hours a veteran works and the amount of first-year wages paid.  Employers who hire veterans with service-related disabilities may be eligible for the maximum credit."
  • The IRS stated, "Normally, an eligible employer must file Form 8850 with the state workforce agency within 28 days after the eligible worker begins work.  But according to today’s guidance, employers have until June 19, 2012, to complete and file this newly-revised form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012.  The 28-day rule will again apply to eligible veterans hired on or after May 22, 2012."
  • Notice 2012-13, posted today on IRS.gov, and the instructions for Form 8850 provide further details.

MISCELLANEOUS GUIDANCE RELEASED:

Notice 2012-17 provides answers to frequently asked questions from employers regarding automatic enrollment, employer shared responsibility and waiting periods.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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