Small Business Taxes & ManagementTM--Copyright 2005, A/N Group, Inc.
Introduction
Each year around this time, the IRS issues its annual priority guidance plan. We have reproduced the plan in its entirety at 2005-2006 Priority Guidance Plan. The Plan outlines the regulation, revenue procedure and other guidance projects the IRS plans to undertake and publish in the coming fiscal year. Also included is a month-by-month summary of recurring releases such as the Applicable Federal Rate, inflation updates, quarterly interest rates on under- and over-payments, etc. The total plan runs to 16 pages. We've selected and reproduced below issues we feel are of the most interest to small business owners and CPAs.
Employee Benefits
Guidance on the tax treatment of distributions from Roth retirement plans.
Guidance on benefits not permitted in a defined benefit plan.
Guidance on abusive arrangements under Section 401(a)(4).
Guidance under Section 411 regarding accrual and vesting of benefits provided pursuant to qualified retirement plans.
Regulations under Section 411(d)(6) relating to the elimination of optional forms of benefit in defined benefit plans and additional issues.
Update of the regulations on the definition of "highly compensated employee" under Section 414(q) to reflect statutory changes since the existing regulations were issued.
Modification of the Section 1.61-21(g) consistency rule in connection with Section 274(e)(2) guidance.
Guidance on accountable plans and per diem payments.
Revenue ruling on post-grant restriction on stock.
Guidance on the revocation of Section 83(b) elections.
Additional guidance on debit cards in employer-provided medical expense reimbursements.
Guidance on the impact of providing a 2-1/2 month grace period for dependent care assistance offered under a cafeteria plan.
Proposed regulations on cafeteria plans under Section 125 updating regulations for statutory changes and providing additional guidance.
Guidance on the impact of providing a 2-1/2 month grace period for flexible spending accounts on health savings accounts (HSAs).
Guidance on the application of SECA to Conservation Reserve Program payments.
Guidance on tips paid to restaurant employees.
Exempt Organizations
Guidance on donee reporting for car donations.
General Tax Issues
Guidance under Section 45D regarding how an entity meets the requirements to be a qualified active low-income community business for purposes of the new markets tax credit when its activities involve targeted populations.
Revenue ruling on who can claim the Work Opportunity Tax Credit and the Welfare-to-Work Credit.
Guidance on Rev. Rul. 2003-112 regarding the Work Opportunity Tax Credit.
Guidance under Section 168 on asset classes and activity classes under Rev. Proc. 87-56.
Guidance under Section 170(f)(11) as added by the American Jobs Creation Act of 2004 regarding reporting of noncash charitable contributions.
Proposed regulations under Section 170(f)(12) as added by the American Jobs Creation Act of 2004, and related provisions, regarding contributions of qualified vehicles.
Proposed regulations under Section 199 regarding the deduction for income attributable to domestic production activities. Interim guidance was issued as Notice 2005-14.
Proposed regulations under Section 274(e) as amended by the American Jobs Creation Act of 2004 regarding the disallowance of entertainment expenses. Interim guidance was issued as Notice 2005-45.
Guidance under Section 469 regarding the limitation on losses and credits relating to passive activities.
Revenue ruling under Section 1241 on the cancellation of lease or distributor agreements.
Gifts, Estates, and Trusts
Guidance regarding the consequences under various estate, gift, and generation-skipping transfer tax provisions of using a family-owned company as the trustee of a trust.
Guidance under Section 2053 regarding the extent to which post-death events may be considered in determining the value of a taxable estate.
Revenue procedures under Sections 2055 and 2522 containing sample charitable lead trust provisions.
Partnerships
Guidance under Section 704(b)(2) regarding whether partnership allocations have substantial economic effect.
Guidance under Section 706(d) regarding the determination of distributive share when a partner's interest changes.
Guidance under Section 707(c) regarding guaranteed payments.
Update of the Section 751 regulations.
Guidance under Sections 704, 734, 743, and 755 as amended by the American Jobs Creation Act of 2004 regarding the disallowance of certain partnership loss transfers, and no reduction of basis in stock held by a partnership in a corporate partner. Interim guidance was issued as Notice 2005-32.
Subchapter S
Guidance under Section 1367 regarding adjustments in basis of indebtedness.
Tax Accounting
Proposed regulations under Sections 162 and 263 regarding the deduction and capitalization of expenditures for tangible assets.
Regulations under Sections 195, 248 and 709, as amended by the American Jobs Creation Act of 2004, regarding the elections to amortize start-up and organizational expenditures.
Proposed regulations under Section 263(a) regarding the treatment of capitalized transaction costs.
Guidance under Section 263A regarding whether "negative" additional Section 263A costs are taken into account under Section 1.263A-1(d)(4).
Revenue procedures updating guidance regarding changes in accounting periods.
Revenue procedure under Section 446 regarding changes in method of accounting for rotable spare parts.
Regulations under Section 446 regarding the definition of a method of accounting.
Update of Rev. Proc. 2005-9 regarding automatic method of accounting changes under the rules for capitalization of intangibles.
Update of Rev. Proc. 2002-9 regarding automatic changes in methods of accounting.
Guidance under Section 460 on contracts that qualify for the rules for home construction contracts.
Revenue ruling under Section 461 regarding the proper year for the deduction of payroll taxes on deferred compensation by accrual method taxpayers.
Guidance on the tax treatment of vendor allowances.
Revenue procedure regarding the valuation of parts inventory by heavy equipment distributors.
Tax Administration
Regulations under Section 6081 simplifying the extension process.
Update of Rev. Ruls. 75-365, 366 and 367 regarding interests in real estate held by a decedent.
Revenue ruling regarding the classification of items as partnership items or affected items under the TEFRA partnership provisions.
Proposed regulations regarding the procedures relating to third party and John Doe summonses.
Copyright 2005 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject.--ISSN 1089-1536
--Last Update 08/16/05