Updated Resources and Guidance from the IRS

IRS launches A Closer Look webpage on IRS.gov; new article focuses on audits

The IRS unveiled a new online publication called “A Closer Look” (click here) to provide a more detailed look at some of the major issues facing IRS and tax administration.

This week’s post focuses on compliance and audits. The post includes data about audit rates that provides insight and perspective into which income groups are more likely to be audited. Click here.

The IRS will publish “A Closer Look” frequently and will include articles from a variety of IRS leaders. The online publication will cover a variety of timely issues of interest to taxpayers and the tax community. It will also provide a detailed look at key issues affecting everything from IRS operations and employees to issues involving taxpayers and tax professionals.

 


IRS unveils redesigned webpage to help people who are closing a business

The IRS unveiled a redesigned page on IRS.gov to help business owners navigate the federal tax steps when closing a business (click here).

The “Closing a Business” page is in simple steps, so business owners and self-employed individuals can quickly find information they need.

The information includes what forms to file and how to report revenue received in the final year of business and expenses incurred before closure.

 


New recorded Opportunity Zones video available

The IRS posted a new Opportunity Zones webinar for an overview that includes tax benefits, proper reporting of investor elections, COVID-19 disaster relief and much more.  Click here.

Opportunity Zones went into effect on December 22nd, 2017, with the enactment of the Tax Cuts and Jobs Act. Opportunity Zones are an economic development tool designed to encourage long-term investment and boast job creation in select distressed rural and urban communities.

Taxpayers receive federal tax benefits when they invest the amount of eligible gains in the equity in a Qualified Opportunity Fund.

 


Final regulations issued on meals and entertainment deduction

The IRS issued final regulations on the business expense deduction for meals and entertainment.  Click here.

The 2017 Tax Cuts and Jobs Act generally eliminated the deduction for any expenses related to activities generally considered entertainment, amusement or recreation. However, taxpayers may still deduct business expenses related to food and beverages if certain requirements are met.

These final regulations address the disallowance of the deduction for expenditures related to entertainment, amusement or recreation activities, including certain exceptions. They also provide guidance to determine whether an activity is considered entertainment.

 


Termination of Hong Kong Reciprocal Agreement

Announcement 2020-40; The United States provided written notification, dated August 18, 2020, to the Government of the Hong Kong Special Administrative Region of its termination of a reciprocal agreement to exempt from income tax certain income from the international operation of ships. This announcement provides that the termination shall take effect on January 1, 2021, and shall have effect for taxable years beginning on or after that date.  Click here.