Insights & News

Tax Insights, October 28, 2015
Tracking Tax News You Need to Know

October 28, 2015

Guidance Identifying Basket Options as Listed Transactions Reissued
The IRS issued Notice 2015-73; 2015-46 IRB 1, revoking Notice 2015-47, in response to commenters who expressed concern that difficulty in identifying transactions that are the same as, or substantially similar to, the transaction described in Notice 2015-47 may cause taxpayers to file disclosures for transactions that are not intended to be treated as listed transactions at this time. Under Notice 2015-47, the IRS announced that a “basket option contract” is considered a listed transaction and a “basket contract” is considered a transaction of interest. The IRS is concerned that the contracts may be used in an attempt to defer income recognition and convert short-term capital gain and ordinary income to long-term capital gain. Notice 2015-73 provides additional details on the types of transactions that are the same as, or substantially similar to, the transactions described therein.

Proposed Regulations Define Terms Regarding Marital Status
The IRS has issued proposed regulations (REG-148998-13) that reflect the holdings of Obergefell v. Hodges, 576 U.S. ___, 135 S. Ct. 2584 (2015); Windsor v. United States, 570 U.S. ___, 133 S. Ct. 2675 (2013); and Revenue Ruling 2013-17 (2013-38 IRB 201) and that define terms in the Internal Revenue Code describing the marital status of taxpayers. The proposed regulations primarily affect married couples, employers, sponsors and administrators of employee benefit plans, and executors. Further, the IRS may provide additional guidance on these issues as needed (e.g., the IRS has already issued more particular guidance for employers regarding the application of Revenue Ruling 2013-17 to qualified retirement plans), and that guidance remains in effect. See Notice 2014-19 (2014-47 IRB 979).

IRS Releases Final FATCA Report Form for 2015
The IRS has released the final version of the 2015 Form 8966, “FATCA Report,” which includes all the information that must be reported to the IRS as required by FATCA.

2015 Algeria-U.S. FATCA Agreement Available
The text is available of the agreement signed by Algeria and the United States to improve international tax compliance and implement the information reporting and withholding tax provisions of FATCA.

Several Competent Authority Arrangements Available
The U.S. competent authorities have signed arrangements with the following countries under the respective country’s intergovernmental agreements with the U.S. to implement the information reporting and withholding tax provisions of the FATCA:

IRS Releases Several International Practice Units
The IRS made available its international practice units on the monetary penalties for failure to timely file a substantially complete Form 5471, “Information Return of U.S. Persons With Respect to Certain Foreign Corporations;” on requesting an authorization of agent when a U.S. corporation under exam is owned by a 25 percent foreign shareholder; and that explain multiple ways to obtain records located in a foreign jurisdiction when a taxpayer does not provide them in response to an information document request.

IRS Announces Pension Plan Limitations for 2016
The IRS has announced in IR-2015-118 the cost of living adjustments that affect dollar limitations for pension plans and other retirement-related items for the 2016 tax year.

IRS, States, Industry Continue Progress to Protect Taxpayers From Identity Theft
The Internal Revenue Service, state tax administrators and leaders of the tax industry announced continued progress to expand and strengthen protections to help prevent stolen identity refund fraud for the 2016 tax season. Thirty-four state departments of revenue and 20 tax industry members have signed memorandums of understanding regarding roles, responsibilities and information sharing, with more expected to sign later.

Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.

Copyright © 2015 Stradley Ronon Stevens & Young, LLP. All rights reserved.

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