This Week's Internal Revenue Bulletin

HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

ADMINISTRATIVE

T.D. 9940, page 311. The final regulations describe the procedures used by the IRS to handle misdirected direct deposits of tax refunds. The procedures describe the reporting, identification, and recovery processes used for misdirected direct deposit refunds. The procedures described in the final regulations may be used by any taxpayer whose refund was disbursed as a direct deposit but the taxpayer believes is missing.

EMPLOYEE PLANS

Notice 2021-03, page 316. This notice provides a 6-month extension of the relief provided in Notice 2020-42. For the period from January 1, 2021, through June 30, 2021, this notice extends two types of relief from the physical presence requirement in § 1.401(a)-21(d)(6)(i) for participant elections required to be witnessed by a plan representative or a notary public: (1) temporary relief from the physical presence requirement for any participant election witnessed by a notary public in a state that permits remote notarization (either by law or through an executive order), and (2) temporary relief from the physical presence requirement for any participant election witnessed by a plan representative. This temporary relief is extended in order to further accommodate local shutdowns and social distancing practices in response to the Coronavirus Disease 2019 pandemic (COVID-19 Emergency). This notice also solicits comments on the relief.

EXCISE TAX

Notice 2021-04, page 319. Notice 2021-04 provides the final extension of the temporary dyed fuel relief provided in section 3.02 of Notice 2017-30, 2017-21 I.R.B. 1248. The temporary relief was extended through December 31, 2018, by section 3 of Notice 2018-39, 2018-20, I.R.B. 582, then extended through December 31, 2019, by section 3 of Notice 2019-04, 2019-02 I.R.B. 282, and further extended through December 31, 2020, by section 3 of Notice 2020-04, 2020-04 I.R.B. 380. A claimant may submit a refund claim for the § 4081(a)(1) tax imposed on undyed diesel fuel and kerosene for fuel that is (1) removed from a Milwaukee or Madison terminal; (2) entered into a Green Bay terminal within 24 hours; and (3) subsequently dyed and removed from that Green Bay terminal. The relief provided in this notice takes effect beginning January 1, 2021, and ending December 31, 2021.

REG-130081-19, page 321. These final rules regarding grandfathered group health plans and grandfathered group health insurance coverage amend the current rules to provide greater flexibility for certain grandfathered health plans to make changes to certain types of cost-sharing requirements without causing a loss of grandfather status.

EXEMPT ORGANIZATIONS

Notice 2021-01, page 315. This notice provides that, while subject to a delay, private foundations must electronically file Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code, as required by section 3101 of the Taxpayer First Act of 2019 (Pub. L. No. 116-25) amendments to section 6033 of the Internal Revenue Code. Private foundations may no longer rely on Treas. Reg. § 53.6011-1(c) as a result of this electronic filing mandate.

INCOME TAX

Rev. Rul. 2021-01, page 294. Federal rates; adjusted federal rates; adjusted federal long-term rate, and the long-term tax exempt rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for January 2021.

T.D. 9925, page 296. These final regulations provide guidance under section 274 of the Internal Revenue Code (Code) regarding certain amendments made to section 274 by the Tax Cuts and Jobs Act of 2017 (TCJA). These final regulations address the elimination of the deduction under section 274 for entertainment expenses paid or incurred in taxable years beginning after December 31, 2017. The final regulations provide guidance to distinguish entertainment expenses from meal and beverage expenses and address the application of certain exceptions under section 274(e) that may allow such expenses to be deductible. These final regulations affect taxpayers who pay or incur expenses for meal and entertainment expenses.