e-News for Tax Professionals 2019-19

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Issue Number:  2019-19

Inside This Issue

1. New Draft Instructions for Form W-4 Now Online
2. Faxing and Third-Party Mailing of Certain Tax Transcripts to End Soon
3. Register for the IRS Nationwide Tax Forums by June 15 to Save
4. IRS Reminds Taxpayers to Do a Paycheck Checkup
5. Upcoming Webinars: Taxation on Foreign Compensation and Tax Transcript Alternatives
6. Changes to Treatment of Gain or Loss on the Sale of a Partnership Interest
7. Tax Relief for Oklahoma and Nebraska Disaster Victims
8. Technical Guidance

On June 7, the IRS posted a special early draft of the Publication 15-T, Federal Income Tax Withholding Methods, for use in 2020. Publication 15-T will contain all the federal income tax withholding tables. This draft has been released to provide employers with the computation of withholding to be made under the Percentage Method and Wage Bracket Method tables using both the new 2020 Form W-4 and the Forms W-4 from before 2020. Tax practitioners can email comments about this draft of Publication 15-T to WI.W4.Comments@IRS.gov. Comments should be submitted by July 8.

See IRS.gov/ Pub15T for the latest information on the employer instructions and IRS.gov/W4 for the latest on the Form W-4.

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As part of an ongoing effort to protect taxpayers from identity theft, the IRS will end its tax transcript faxing service on June 28. Additionally, the IRS will end its third-party mailing options from the Form 4506 series on July 1.

As an alternative, tax professionals can obtain tax transcripts as follows:

• Request the IRS mail a transcript to the taxpayer’s address of record.
• Use the e-Services Transcript Delivery System to obtain masked individual and business transcripts.
• Obtain a masked individual or business transcript by calling the IRS and faxing an authorization to the IRS assistor, who will place the transcript into the tax practitioner’s e-Services secure mailbox.

For tax preparation purposes, tax practitioners may:

• Obtain an unmasked wage and income transcript by calling the IRS and faxing an authorization to the IRS assistor, who will place the document in the tax practitioner’s e-Services secure mailbox.
• Obtain an unmasked wage and income transcript if authorization is already on file by using e-Service’s Transcript Delivery System.

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The IRS reminds tax professionals that the reduced early bird rate for all five 2019 IRS Nationwide Tax Forums ends June 15. The Tax Forums will be held on the following dates:

• July 9 – 11, National Harbor, Md. (Washington, D.C.)
• July 23 – 25, Chicago, Ill.
• Aug. 6 – 8, New Orleans, La.
• Aug. 13 – 15, Orlando, Fla.
• Sept. 17 – 19, San Diego, Calif.

If you want to stay at the forum hotel, it’s important to reserve early. The room block for National Harbor closes June 10. Visit www.irstaxforum.com to register for the forums and reserve your room.

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On June 10, the IRS will launch a weeklong withholding outreach campaign to encourage taxpayers to do a Paycheck Checkup. Daily messages will be disseminated through IRS news releases, tax tips and social media. The topics will include:

• How to use the IRS Withholding Calculator to get withholding right for 2019.
• Why taxpayers should do an annual Paycheck Checkup.
• How to avoid an unexpected tax bill next year at tax time.
• How the Tax Cuts and Jobs Act affects withholding, taxes owed and refunds. 
• Why and how to pay estimated tax payments.

IRS partners and tax professionals are encouraged to share these messages.

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The webinar, U.S. Taxation of Employees of Foreign Governments and International Organizations, will be presented on June 13, at 2 p.m. ET. The 100-minute webinar will consider how to determine whether compensation from a foreign government or international organization is subject to U.S. tax, describe the effect of U.S. tax residency status and/or visa type on U.S. taxation, explain the exemption under Internal Revenue Code section 893, and note the consequences of signing or not signing USCUS Form I-508. Tax professionals can earn two continuing education credits.

Additionally, on June 19, the webinar, Tax Transcripts: Alternatives to Faxing and Third-Party Mailing, will be presented at 2 p.m. ET for tax professionals only. As the IRS will soon stop faxing transcripts and third-party mailings via the Form 4506 series, tax professionals will learn about alternatives and how to obtain masked and certain unmasked transcripts needed for tax administration.

Visit the Upcoming Webinars page on IRS.gov for a complete list of webinars.

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The Tax Cuts and Jobs Act (TCJA) amended the treatment of gain or loss on the sale of a partnership interest as well as withholding on the transfer of non-publicly traded partnership interests. In general, the new law treats a foreign taxpayer’s gain or loss on the sale or exchange of a partnership interest as effectively connected with the conduct of a trade or business in the United States to the extent that gain or loss would be treated as effectively connected with the conduct of a trade or business in the United States if the partnership sold all of its assets.

In this circumstance, the new law also imposes a 10 percent withholding tax on the amount realized from the sale or exchange of a partnership interest by a foreign taxpayer. See Comparison of changes to rules for treatment of gains and losses on the sale of partnership interest under TCJA.

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Victims of severe storms, tornadoes, straight-line winds, and flooding that took place on May 7 in Oklahoma may qualify for tax relief from the IRS. Additionally, storm victims in Holt County, Nebraska, now qualify for tax relief following the March 9 severe storm and flooding in that area. Visit the IRS disaster relief page for updates on tax relief for disaster victims.

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Revenue Ruling 2019-15 provides the interest rates for underpayments and overpayments. The rates for interest determined under Section 6621 of the code for the calendar quarter beginning July 1, will be 5 percent for overpayments (4 percent in the case of a corporation), 5 percent for underpayments, and 7 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 2.5 percent.

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