IRS announces first batch of CPEOs
The IRS said on June 1 (News Release IR-2017-103) it had issued notices of certification to 84 certified professional employer organizations (CPEOs), the first group to receive the designation. Secs. 7705 and 3511, added by the Tax Increase Prevention Act of 2014, P.L. 113-295, allow an organization that meets bonding, financial review, and other requirements to be certified by the IRS as a CPEO. A CPEO is generally treated as the employer for purposes of employment tax liability of certain employees performing services for a customer of the CPEO under a qualifying contract, but only for wages and other compensation paid to the employee by the CPEO.
Letter ruling and closing agreement fees now payable online
The IRS on June 15 (News Release IR-2007-102) began accepting payment of user fees for letter rulings, closing agreements, and certain other rulings electronically through the federal government's Pay.gov website. After Aug. 15, this will be the only way to make these payments. Before June 15, the fees could be paid only by check or money order, which remains an option until Aug. 15. Once payment is made (via credit or debit card, direct debit, or electronic funds withdrawal), requesters should print a copy of the completed payment form and include it with the ruling request, which still must be mailed or hand-delivered to the IRS. Rulings affected include those requested on Form 1128, Application to Adopt, Change, or Retain a Tax Year; Form 2553, Election by a Small Business Corporation; Form 3115, Application for Change in Accounting Method; and Form 8716, Election to Have a Tax Year Other Than a Required Tax Year.
Leveraged spinoffs removed from IRS no-ruling list
The IRS announced in May with Rev. Proc. 2017-38 that it would once again issue private letter rulings and determination letters on "leveraged spinoffs." The revenue procedure deletes Section 5.01(4) of Rev. Proc. 2017-3 (the current no-ruling list), which stated that the IRS would not issue ruling letters regarding whether Sec. 355 or Sec. 361 applies to a distributing corporation's distribution of stock or securities of a controlled corporation in exchange for, and in retirement of, any putative debt of the distributing corporation if the debt is issued in anticipation of the distribution.
HSA limits increase slightly
Under Rev. Proc. 2017-37, the 2018 inflation-adjusted annual contribution limits for health savings accounts (HSAs) will increase from 2017 limits by $50 to $3,450 for individuals with self-only coverage and by $150 to $6,900 for family coverage. The related minimum deductibles for high-deductible health plans (HDHPs) that must accompany an HSA will also increase, to $1,350 for self-only and $2,700 for family coverage, as will the maximum out-of-pocket expenses for HDHPs, to $6,650 for self-only coverage and $13,300 for family coverage.
