William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence Nov 25, 2020

Posted by William Byrnes on November 25, 2020

This week we analyze the proposed regulations from the DOL on determining who is (and is not) an independent contractor. This has become a hot issue in light of the new rules that California has passed for companies operating there and the impact that they may have on “gig economy” companies. California’s rules are still tied up in litigation, and it remains to be seen how the new DOL rules might affect them. We also have updates on new rules for bonus depreciation for partnerships and withholding on periodic retirement and annuity payments.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

DOL Proposes New Test for Determining Independent Contractor Status

The DOL released a proposed rule that would address when a worker will be treated as an independent contractor for tax purposes. A new economic reality test would apply and consider (1) the nature and degree of the worker’s control over the work and (2) the worker’s opportunity for profit or loss. If the worker sets their own schedule, chooses assignments, works with little or no supervision and can work for others, the circumstances weigh in favor of independent status. For more information on employment classification, visit Tax Facts Online. Read More

Final Bonus Depreciation Rules Give Partnerships a Valuable Tax Break

The IRS final bonus depreciation rules made one change that could prove valuable to partnerships. The 2017 tax reform legislation allows certain used property to qualify for bonus depreciation. However, anti-churning rules apply to prevent abuse. Under the 2019 proposed rules, a partner was treated as having a prior interest in property if the partner was a partner in a partnership at any time that the partnership owned the property. The final regulations revoked the look-through rule because of the administrative burden of enforcement. Under the final rules, taxpayers are not considered to have previously owned property if that property is disposed of within 90 days of its placed-in service date, as long as the asset is not purchased and placed in service again within the same tax year. For more information on the bonus depreciation rules, visit Tax Facts Online. Read More

IRS Releases Final Regs on Withholding on Periodic Retirement and Annuity Payments

The IRS has finalized regulations that clarify tax withholding rules for periodic retirement and annuity payments. Pre-tax reform, the default withholding rate was based on a married taxpayer with three withholding exemptions. Post-reform, the personal exemption has been suspended and Congress directed the Treasury to provide updated withholding rules The IRS has also announced that it intends to release a revised 2021 Form W-4P. The regulations apply to payments made after December 31, 2020. For more information, visit Tax Facts Online. Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin on January 18 spring semester. See the international tax course list by > weekly topic here. <

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Ranked in top 20 public universities by Wall Street Journal / Times Higher Education (2020)

#1 endowment for U.S. public universities, #7 overall

#1 of U.S. public universities for a superior education at an affordable cost

#1 for most CEOs employed by Fortune 500

Rank 11th “Best Public Colleges” Money’s Best Colleges Report, 2019

Texas A&M ranks #1 in Texas, #1 in the SEC, and #12 in the U.S. in Washington Monthly’s 2020 overall college rankings based on the quality of education, accessibility, graduation rates, student involvement, and research: see tx.ag/WashMonth20

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