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

REV. PROC. 2018-50, page 610. User fees for applications for residency certifications made on Form 8802 are increasing from $85 to $185 for non-individual taxpayers as of December 1, 2018.

Employee Plans

REV. PROC. 2018-52, page 611. The revenue procedure modifies and supersedes Rev. Proc. 2016-51, 2016-42 I.R.B. 465, which sets forth the Employee Plans Compliance Resolution System (“EPCRS”), a comprehensive system of correction programs administered by the Employee Plans Division (TE/GE) for sponsors of retirement plans that have failed to satisfy certain requirements under § 401(a), 403(a), 403(b), 408(k), or 408(p) of the Code. This revenue procedure sets forth new procedures for using the www.pay.gov website to file VCP submissions and pay user fees. Beginning on April 1, 2019, the IRS will no longer accept paper VCP submissions or process user fees paid with a paper check. During the transition period from January 1, 2019, through March 31, 2019, plan sponsors may file VCP submissions with the IRS either by using www.pay.gov in accordance with sections 10 and 11 of the revenue procedure or by filing paper VCP submissions in accordance with the procedures in sections 10 and 11 of Rev. Proc. 2016-51. Rev. Proc. 2016-51 is modified and superseded.

Income Tax

Notice 2018-76, page 599. This notice provides transitional guidance on the deductibility of expenses for certain business meals under § 274 of the Internal Revenue Code. Section 274 was amended by the Tax Cuts and Jobs Act, Pub. L. No. 115–97, § 13304, 131 Stat. 2054, 2123 (2017) (the Act). As amended by the Act, § 274 generally disallows a deduction for expenses with respect to entertainment, amusement, or recreation. However, the Act does not specifically address the deductibility of expenses for business meals.

Notice 2018-77, page 601. Optional special per diem rates. This notice provides the 2018-2019 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. The notice includes (1) the special transportation industry rate, (2) the rate for the incidental expenses only deduction, and (3) the rates and list of high-cost localities for the high-low substantiation method.

Notice 2018-78, page 604. Notice 2018-78 announces extended deadlines for the basis election provided in section 965 proposed regulations and postponement for taxpayers affected by Hurricane Florence to make elections, and file transfer agreements, related to section 965. The notice also announces that the rules concerning the determination of the aggregate foreign cash position will be revised to be consistent with Notice 2018-07.

Notice 2018-79, page 606. This notice explains the circumstances under which the four-year replacement period under section 1033(e)(2) is extended for livestock sold on account of drought. The Appendix to this notice contains a list of counties that experienced exceptional, extreme, or severe drought conditions during the 12-month period ending August 31, 2018. Taxpayers may use this list to determine if any extension is available.

Notice 2018-80, page 609. This notice announces that the Treasury Department and the IRS intend to issue proposed regulations providing that market discount is not includible in income under section 451(b) of the Internal Revenue Code, as added by section 13221 of the TCJA.