Tax Withholding & Reporting Blog

Developments and Trends in Tax Withholding and Reporting

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Last week, the Treasury Department released the “Green Book,” formally known as the General Explanations of the Administration’s Revenue Proposals.  Among its proposals, the Green Book addresses the treatment of on-demand pay arrangements.  These arrangements, which have recently grown in popularity, permit employees to access a portion of their earned wages in advance…

[This post was originally published as an Alert by Covington Financial Services.]

On December 7, 2021, the Financial Crimes Enforcement Network (“FinCEN”) invited public comment on its proposed rule (the “Proposed Rule”) implementing the beneficial ownership disclosure requirements of the Corporate Transparency Act (“CTA” or “Act”). Comments to the Proposed Rule are…

The Internal Revenue Service recently released an online tool to help U.S. withholding agents comply with withholding and reporting obligations on IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding.  Forms 1042-S are issued by withholding agents to non-U.S. beneficial owners of U.S. source FDAP income under Chapter 3 and to non-U.S.…

Section 80604 of the bipartisan Infrastructure Investment and Jobs Act (H.R. 3684) amends Section 3134 of the Internal Revenue Code to terminate the employee retention credit for employers subject to closure for COVID-19 effective October 1, 2021.  The legislation, which passed the House on November 5 (after passing the Senate on August 10), was presented…

The bipartisan infrastructure bill introduced in the Senate earlier this week includes a provision that would end early the employee retention credit, which was codified in Section 3134 of the Internal Revenue Code by the American Recovery Plan Act earlier this year.  The Section 3134 credit, which took effect on July 1 but mirrors the…

The Supreme Court, today, denied New Hampshire’s motion for leave to file a bill of complaint challenging Massachusetts’ COVID-related tax regulations.  The decision comes little more than a month after the Acting Solicitor General of the United States filed an amicus brief urging the court to deny the motion.  In addition to New Hampshire, the…

In February, a U.S. Tax Court opinion in Anikeev v. Commisioner  addressed challenging issues regarding the IRS’s existing policy with respect to the taxation of credit card rewards and other rebates.  The case involves Mr. and Mrs. Anikeev, each of whom held a Blue Cash American Express Card (“Blue Card”) during 2013 and 2014, on…

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the “ARPA”) into law.  The ARPA includes clarifying language regarding the scope of Form 1099-K (Payment Card and Third Party Network Transactions) reporting for third party payment networks and a change to the de minimis reporting standard applicable to third party…

Almost a year after the employee retention credit was adopted as part of the Coronavirus, Aid, Relief, and Economic Security Act (“CARES Act”), and nearly a month after the final Form 941, Employer’s Quarterly Federal Tax Return, claiming the credit for 2020 was due, the IRS issued Notice 2021-20 (the “Notice”).  This is the…