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

Notice 2019-20, page 927. This Notice provides penalty relief under sections 6722 (failure to furnish correct payee statements); 6698 (failure to file partnership return); section 6038(b) and (c) (failure to furnish information with respect to certain partnerships); and any other section for filing or furnishing Schedules K-1 or other forms or statements, where a penalty is imposed solely as a result of failing to include information about partners' negative tax basis capital accounts for the 2018 tax year.

Notice 2019-22, page 931. Section 30D provides a credit of up to $7,500 for new qualified plug-in electric drive motor vehicles sold after December 31, 2009. This notice announces the credit phase-out schedule for new qualified plug-in electric drive motor vehicles sold by General Motors, LLC. Section 30D of the Internal Revenue Code provides for a credit determined under § 30D(b) for certain new qualified plug-in electric drive motor vehicles. The new qualified plug-in electric drive motor vehicle credit begins to phase out for a manufacturer's qualified plug-in electric drive motor vehicles in the second calendar quarter after the calendar quarter in which at least 200,000 of the manufacturer's vehicles that qualify for the credit have been sold for use or lease in the United States (determined on a cumulative basis for sales after December 31, 2009). General Motors, LLC has submitted quarterly reports that indicate that its cumulative sales of qualified plug-in electric drive motor vehicles reached the 200,000-vehicle limit during the calendar quarter ending December 31, 2018. Accordingly, the credit for all new qualified plug-in electric drive motor vehicles sold by General Motors, LLC will begin to phase out on April 1, 2019.

EMPLOYEE PLANS

Notice 2019-21, page 927. This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for March 2019 used under § 417(e)(3)(D), the 24-month average segment rates applicable for March 2019, and the 30-year Treasury rates, as reflected by the application of § 430(h)(2)(C)(iv).

REV. RUL. 2019-06, page 919. This revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, effective January 1, 2019.

INCOME TAX

Notice 2019-24, page 932. Notice 2019024 provides for adjustment to the limitation on housing expenses for purposed of section 911 of the Internal Revenue Code. These adjustments are made on the basic geographical differences in housing costs in the United States. Further, if the limitation on housing expenses is higher for taxable year 2019 than the adjusted limitations on housing expenses provided in Notice 20180 44, qualified taxpayers may apply the adjusted limitations for taxable year 2019 to their 2018 taxable year.

REV PROC 2019-15, page 939. Attached is Revenue Procedure 2019015, which provides a waiver for the time requirements for individuals electing to exclude their foreign earned income who must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. Rev. Proc. 2019015 adds the Democratic Republic of the Congo, Cuba, Iraq, and Nicaragua to the list of waiver countries for tax year 2018 for which the minimum time requirements are waived. Generally, U.S. citizens or resident aliens living and working abroad are taxed on their worldwide income. However, if their tax home is in a foreign country and they meet either the bona fide residence test or the physical presence test, they can choose to exclude from their income a limited amount of their foreign earned income ($103,900 for 20018). Both the bona fide residence test and the physical presence test contain minimum time requirements.

REV. RUL. 2019-08, page 923. Federal rates; adjusted federal rates; adjusted federal long-term rate, the long-term exempt rate, and the blended annual rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for April 2019.

REV. RUL. 2019-09, page 925. This revenue ruling suspends Rev. Rul. 57-464, 1957-2 C.B. 244, and Rev. Rul. 57-492, 1957-2 C.B. 247, pending the completion of a study by the Department of the Treasury and the Internal Revenue Service regarding the active trade or business requirement under sections 355(a)(1)(C) and (b) of the Internal Revenue Code.

T.D. 9851, page 917. These final regulations provide guidance on the requirements that are used to determine whether a corporation qualifies as a regulated investment company (RIC) for federal income tax purposes. The final regulations clarify that amounts included in gross income under § 951(a)(1)(A) or 1293(a) are treated as dividends only to the extent that there is an actual distribution out of the earnings and profits of the taxable year that are attributable to the amounts so included. The final regulations also provide that inclusions under §§ 951(a)(1) and 1293(a) derived with respect to a RIC's business of investing in stock, securities, or currencies are other qualifying income for purposes of the RIC income test under § 851(b)(2).