Titled: Decoding IRS Guidance Warnings: Unraveling 2023-2025 Plans
The annual IRS Priority Guidance Plan (PGP) reveals clues about upcoming focus areas for the Treasury and Internal Revenue Service (IRS). By comparing the 2024-2025 and 2023-2024 PGPs, we can anticipate changes in the tax landscape for the following year.
The initial PGP is published annually in fall, with a list of priority projects that receive attention from July 1 of the preceding year through June 30 of the current year. This plan is typically followed by three quarterly updates, culminating in the subsequent year's initial PGP.
The 2024-2025 PGP, released in October 2024, includes 231 guidance projects, while the 2023-2024 PGP, released September 2023, features 237 projects. The new plan follows a similar structure, with 16 subject matter categories divided into:
- Consolidated returns
- Corporations and their shareholders
- Employee benefits
- Energy security
- Excise tax
- Exempt organizations
- Financial institutions and products
- General tax issues
- Gifts, estates, and trusts
- Insurance companies and products
- International
- Partnerships
- S corporations
- Tax accounting
- Tax administration
- Tax-exempt bonds
The international section remains a significant focus, with seven subcategories that cover various topics, including but not limited to:
- Deemed inclusions from foreign entities
- Inbound transactions
- Outbound transactions
- Foreign tax credits
- Transfer pricing
- Sourcing and expense allocation
- Other topics
The 2024-2025 PGP includes 36 international projects, with three new additions and the removal of one project from the 2023-2024 PGP. Some noteworthy changes include:
- Proposed regulations on basis under Section 961(c) and transactions in which a domestic corporation acquires stock of a controlled foreign corporation in a liquidation or asset reorganization.
- New proposed guidance that clarifies the information required to request private letter rulings for PFIC retroactive qualified electing fund status under Reg. Section 1.1295-3(f).
- Revisions to the initial PGP for better readability and organization.
The enrichment data suggests that both the 2024-2025 and 2023-2024 PGPs will continue to prioritize international tax concerns with a focus on areas like qualified electing fund elections, transfer pricing, and withholding rules.
The IRS utilizes the Annual Priority Guidance Plan (PGP) to guide its focus areas, and the 2024-2025 PGP reveals an ongoing emphasis on international tax concerns, such as qualified electing fund elections and transfer pricing. Interestingly, the new PGP includes proposed regulations on Section 961(c) and transactions involving controlled foreign corporations.
Furthermore, individuals and businesses dealing with the IRS should be aware that the 2024-2025 PGP still prioritizes international tax issues, with plans to address specific areas, including private letter rulings for PFIC retroactive qualified electing fund status and revised withholding rules.
