T&K Tax Knowledge

Proposed Legislation Would Increase Above-the-Line Charitable Contribution Deduction

Posted by David Rosenberg, Tyree Collier, Lee Meyercord, Katie Gerber, and Jana Wight

Proposed legislation with bipartisan support would increase the $300 above-the-line deduction to over $4,000 for individuals and $8,000 for married couples for charitable contributions made in 2020. As explained in a prior post, the CARES Act provided a new above-the-line deduction (i.e., reduces taxable income dollar-for-dollar) for up to $300 of charitable contributions beginning in 2020. This deduction is available to all individual donors, including those who utilize the standard deduction.

IRS Offers to Settle Tax Court Syndicated Conservation Easement Cases

Posted by Mary McNulty, Abbey Garber, Lee Meyercord, Katie Gerber, and Meagan Horn

 

The IRS recently announced a time-limited settlement offer to taxpayers with pending Tax Court cases involving syndicated conservation easements. The IRS encourages taxpayers who receive a settlement offer letter to consult with their own independent attorney (i.e., an attorney who was not involved in promoting the transaction or recommended by the promoter of the transaction) to evaluate the litigation risks and the settlement offer. Our recent client alert provides additional details on syndicated conservation easements and the settlement offer. Please contact one of the above authors or the Thompson & Knight attorney with whom you regularly work if you have any questions.

IRS Wealth Squad Targets High-Wealth Taxpayers and Their Entities

Posted by Mary McNulty, David Rosenberg, Bill Mureiko, Abbey Garber, Lee Meyercord, Meagan Horn, & Jessica Kirk

     

   

As IRS employees return to their offices and resume audits and collection enforcement efforts, the IRS’s Global High Wealth Industry Group (commonly referred to as the “Wealth Squad”) will embark on an aggressive enforcement campaign targeting high-wealth individuals and the pass-through entities and foundations they control. Targeted taxpayers should understand how the enforcement campaign can impact them and take steps to ensure they are properly prepared for an audit by the Wealth Squad. Our recent client alert provides additional details on the enforcement campaign and steps you can take now to prepare for a potential Wealth Squad audit. Please contact one of the above authors or the Thompson & Knight attorney with whom you regularly work if you have any questions.

IRS Expected to Agressively Target Non-Filers

Posted by Abbey Garber, Mary McNulty, Lee Meyercord, Meagan Horn, and Jessica Kirk

The Treasury Inspector General for Tax Administration (TIGTA) recently released a report finding nearly 880,000 high-income non-filers cost the U.S. government more than $45 billion in lost tax revenue over the years 2014-2016. Now, Congress is demanding answers and action and, in response, the IRS is expected to divert resources to aggressively pursue such noncompliance. A taxpayer who has failed to timely file past tax returns or pay past taxes should take steps now to correct past noncompliance.  More information is available in our recent client alert on this development.  Please contact one of the above authors or the Thompson & Knight attorney with whom you regularly work if you have any questions.

 

IRS Issues Updated Guidance on Employee Retention Credit

Posted by Neely Munnerlyn

    

The IRS has expanded its informal FAQ guidance on the employee retention credit (the “ERC”) which was enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The ERC is a refundable payroll tax credit for employers equal to 50% of qualified wages (including allocable qualified health plan expenses) that eligible employers pay their employees after March 12, 2020 and before January 1, 2021. The maximum amount of qualified wages that may be taken into account with respect to each employee is $10,000 (for a maximum credit of $5,000 per employee). 

Employers Should Consider Equity Compensation in Lieu of Cash

Posted by Jason Loden

   

In the current economic climate, employers should consider granting equity compensation to officers and employees in lieu of cash compensation. Subject to the terms of any existing employment agreements or similar contracts, employers may be able to reduce cash compensation paid to employees in exchange for equity incentives. While equity incentives are not typically a replacement for an employee’s base salary, they may be used as a replacement for bonuses and other cash incentives and potentially a portion of an executive’s base salary.

IRS Issues Guidance on Payroll Tax Deferral Provisions in the CARES Act

Posted by Neely Munnerlyn

 

The Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) allows employers and self-employed individuals to defer payment of the employer share of the 6.2 percent social security tax that they are otherwise responsible for paying for the period beginning on March 27, 2020 (the date of enactment of the CARES Act) through December 31, 2020. It requires that the deferred taxes be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half to be paid by December 31, 2022.

Partnerships Can Amend 2018 and 2019 Tax Returns for COVID-19 Relief

Posted by Abbey Garber, Lee Meyercord, and Jessica Kirk

     

Earlier this week the IRS released an advanced version of Rev. Proc. 2020-23, which allows partnerships subject to the centralized audit regime to file amended tax returns and take advantage of retroactive tax relief provisions in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

IRS Issues Additional Guidance on Payroll Tax Credits

Posted by Neely Munnerlyn

  

The Families First Coronavirus Response Act (the “FFCRA”) allows an employer to claim refundable payroll tax credits for the emergency paid sick leave and emergency paid family leave that an employer is required to provide to employees who are absent from work due to the COVID-19 crisis.  On its website, the IRS has released a series of frequently asked questions (“FAQs”) which provide further information about the requirements, limitations, and application of the FFCRA payroll tax credits.

Covid-19 and Employee Benefit Plans: Frequently Asked Questions

Posted by Russell Gully, Jason Loden, Jessica Morrison, and Neely Munnerlyn

 

The COVID-19 pandemic has resulted in economic hardships for many employers and employees.  These challenges, along with a number of legislative and administrative developments, have led employers to consider making adjustments to their employee benefit programs.  To assist employers with assessing the requirements and considerations for their employee benefit programs, we have answered some commonly-asked questions in a client alert, available here.  Please contact the above authors or the TK tax attorney with whom you regularly work if you have any questions regarding the information in the client alert.