Here’s a look at recent tax-related happenings on the Hill, including a new webpage for Forvis Mazars’ Washington National Tax Office.
Lately on the Hill
Forvis Mazars’ Washington National Tax Office Announces New Webpage
The Washington National Tax Office of Forvis Mazars would like to announce the release of our new webpage. The site is designed as your go-to hub for timely, actionable tax insights and policy resources. We cover a wide array of topics, including the presidential and congressional elections, ongoing legislative updates and analysis, and released guidance from the U.S. Department of the Treasury. We also provide planning insights to help you understand, comply, and potentially benefit from tax-advantaged opportunities.
Our 2024 Election Series, available on the site, provides a comparison of the presidential candidates’ policies and an outlook on the congressional elections. After the election, the series will be expanded to include post-election insights and what we may expect from a tax legislative point of view from the newly elected president and Congress. In addition, our 2024 Election Guide is available now, which includes observations from our legislative consultants in Washington.
As you prepare for the close of 2024 and the monumental tax policy debate and changes coming in 2025, we are continuously releasing our four-part Year-End Planning Series, which covers significant events that shaped the 2024 tax landscape, including the debate on high-impact tax provisions on research and development expenditures, 100% bonus depreciation, and deductible business interest expenses. We also explain important U.S. Supreme Court tax decisions and their impact, significant IRS-released guidance, and planning for potential 2025 changes such as the estate and gift tax exemption and the qualified business income deduction. The series also covers planning considerations from our tax specialty, international, and Private Client groups and is coupled with live webinars available to you.
The webpage also includes links to past publications of From the Hill which, in addition to providing up-to-date information on what is happening on the Hill and in the judicial system as it relates to tax, also provides ongoing guidance released by Treasury and the IRS including regulations, revenue procedures, and notices—to name a few. For some of the more significant guidance released, our site has links to FORsights™ written by our knowledgeable professionals who not only describe the technical provisions in a more digestible way but also provide practical insight into how the guidance can be applied to you.
We encourage everyone to bookmark this new site and subscribe to our FORsights to receive timely and actionable resources designed to help inform and enhance your ability to remain current with governmental requirements, plan for the future, and take advantage of potential tax opportunities.
From the Treasury & IRS
Research Credit Form Nearing Completion for Final Release
The IRS is planning to release the final form and instructions to Form 6765, Credit for Increasing Research Activities, by the end of 2024 or early 2025, according to Holly Paz, commissioner of the Large Business and International (LB&I) Division.1 In September 2023, the IRS proposed changes to the form with plans to make them effective beginning in taxable year 2024.
In June, a draft form was released with changes aimed to “alleviate taxpayer burden, provide taxpayers with a consistent and predefined format and improve the information received for tax administration.”
Effective June 18, 2024, taxpayers no longer need to provide the names of the individuals who performed each research activity and the information each individual sought to discover. This information, however, may be requested if a research credit refund claim is selected for examination.
Corporate Spin-Off Transactions to Receive Proposed Regulations
The IRS has made significant progress on proposed regulations concerning tax-free reorganizations under Section 355, commonly referred to as corporate spin-off transactions, according to Mark Weiss in the IRS Office of Chief Counsel.2
In May, the IRS released Revenue Procedure 2024-24 describing private letter ruling request procedures applicable to these transactions and changing the status quo. Taxpayers have found the revenue procedure difficult to follow and welcome additional guidance.
Released Guidance
Final regulations (T.D. 10010) have been issued regarding domestic production and the sale of eligible components used in solar energy, wind energy, inverters, batteries, and applicable critical minerals under the §45X Advanced Manufacturing Production Credit. The regulations are applicable to eligible components produced and sold both after December 31, 2022 and the date of the regulations’ publication in the Federal Register.
Proposed regulations (REG-118264-23) regard §25C Energy Efficient Home Improvement tax credits available to taxpayers who make qualified energy-efficient improvements to their main homes. The proposed rules apply to manufacturers seeking to become qualified manufacturers of specified property eligible for the credit and for taxpayers who place in service certain eligible home improvement property. The credit applies to eligible property placed in service through December 31, 2032.
Revenue Procedure 2024-31 describes the procedures necessary under §25C for a manufacturer to be considered a “qualified manufacturer” for purposes of manufacturing credit eligible property. Such manufacturers must register, enter into an agreement with the IRS, identify each item of eligible property with a PIN, label the items, and provide regular reports to the Secretary of the Treasury.
Revenue Procedure 2024-40 provides annual inflation adjustments for tax year 2025. Notable adjustments include an increase to the estate tax basic exclusion amount to $13,990,000; an annual gift exclusion increase to $19,000; increases to the standard deduction to $15,000 for individuals filing separately and $30,000 for individuals filing jointly; and adjustments to the marginal tax rates.
Notice 2024-76 provides guidance on the corporate bond monthly yield curve, spot segment rates, 24-month average segment rates, and the interest rate on 30-year Treasury securities.
IR-2024-276 announces the commencement of audit operations for the IRS’ new pass-through compliance unit within the LB&I Division. According to the announcement, the new unit’s focus on pass-through entities such as partnerships, S corporations, and trusts “reflects the IRS’s broader efforts to focus more attention and resources on an area that has historically been under-scrutinized.”
IR-2024-277 permits tax-exempt organizations to not file Form 4626, Alternative Minimum Tax – Corporations, for tax year 2023. Such organizations can be subject to a 15% minimum tax on their average annual financial statement income of any unrelated trades or businesses when greater than $1 billion. Tax-exempt organizations subject to the minimum tax must still report and pay the tax on Form 990-T.
IR-2024-278 encourages all taxpayers to obtain an identity protection personal identification number (IP PIN) ahead of next year’s tax return filing season. This additional safety measure helps prevent thieves from fraudulently obtaining personal information and filing a federal tax return using a taxpayer’s Social Security number. The IRS encourages taxpayers to set up an online account to obtain the IP PIN.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.