William Byrnes' Tax, Wealth, and Risk Intelligence

We all know that the past 18 months have been filled with legislative changes. Laws have been enacted more quickly than ever–and, often, the IRS, DOL and other agencies have stepped in to provide interpretive guidance on a rolling basis. Last week, the IRS announced a change in its official policies when it comes to taxpayer’s ability to rely upon frequently asked questions. Also, as a reminder, employers will no longer benefit from ACA-related “transition relief” starting this year–and, as always, it’s a good time for a 4th quarter withholding checkup.

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes

Robert Bloink, J.D., LL.M.

IRS Updates Frequently Asked Question (FAQ) Process

The IRS announced updates to its processes and policies for frequently asked questions (FAQs) and has provided guidance on the rules for implementing penalties for taxpayers who rely on FAQs.  FAQs often provide important interpretive guidance for taxpayers attempting to understand how new legislation will be implemented. However, the FAQs are updated frequently and without warning. Going forward, FAQs will be announced in a news release and posted to IRS.gov in a fact sheet. Prior versions of the fact sheet FAQs will now be dated and maintained on IRS.gov so that taxpayers can find the version they relied upon. The IRS also released a statement clarifying that if a taxpayer relies on FAQs in good faith and that reliance is reasonable, the taxpayer has a reasonable cause defense against any accuracy-related penalties and negligence penalties if it turns out that the FAQs were not a correct interpretation of the law given the facts.  However, the law itself will continue to control in the taxpayer’s case (not the FAQs). In the wake of the COVID-19 pandemic, IRS FAQs were often the only interpretive materials available.  For examples of how FAQs have functioned to guide taxpayers in interpreting legislation,, visit Tax Facts Online. Read More

Give Your Withholding a Fourth-Quarter Checkup

While it seems hard to believe, the 2021 tax year is almost at an end. The IRS recently reminded taxpayers that the fourth quarter is always a good time for a withholding checkup. Taxpayers still have time to adjust their withholding to withhold additional amounts (or make an estimated tax payment) to avoid a surprise tax bill in April. For 2021, there are a number of new tax provisions that should be considered when examining withholding choices, including COVID-19 tax relief, natural disaster relief and issues created by moving to another state due to a pandemic-related work-from-home policy. As always, issues such as marriage, divorce or having a child will impact the amount employees should have withheld from their paychecks. The IRS offers a tax withholding estimator that can be helpful. Clients who had an unexpected tax bill for the 2020 tax year can use this tool to ensure they’ve paid accurately in 2021 and avoid surprises come April. For more information on tax withholding obligations, visit Tax Facts Online. Read More

Reminder: No Extension for ACA Reporting for 2021

In prior years, the IRS has permitted transition relief and extended the deadline for providing Form 1095-C to individuals from February to March.  (Typically, the due date to furnish the Forms 1095-B and 1095-C to requisite individuals is extended from February 1 to March 1).  This year, there is no extension, so businesses must provide individuals with Forms 1095-B or 1095-C by January 31, 2022.  Form 1094-C and Form 1095-C that must be provided to the IRS are typically not subject to the extension.  The employer must furnish these filings to the IRS by February 28, 2022 if the filing is on paper and March 31, 2022 if the employer is filing electronically.  Under current law, employers that submit 250 or more of the same form must use electronic filing systems.  However, the IRS has proposed a new rule that would require nearly all employers to file electronically (lowering the threshold to 100 forms in 2022 and ten forms starting in 2023).  Employers would also be required to aggregate all forms that they have submitted.  For more information, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2021 legislative and regulatory updates, and the impact on 2022 client planning, as well as other weekly intelligence.

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