Forbes: The 2020-2021 IRS Priority Guidance Plan
The IRS issued the Priority Guidance Plan for 2020-2021 on November 17, 2020. This plan contains the guidance projects that will be the focus of efforts during the 12-month period from July 1, 2020, through June 30, 2021 (referred to as the plan year). The 2020-2021 Priority Guidance Plan contains 191 guidance projects and, as of September 30, 2020, 57 guidance items have been released.
A Guidance Plan is created to make sense of the projects on the IRS Guidance Priority List. In many instances, the IRS and the U.S. Treasury will release a priority Guidance Plan for the year, then provide updates each quarter. The Guidance Plan identifies all the items the two departments need to work on and includes regulations that can affect individuals, small businesses, and corporations.
Several items are of interest to Estate Planners:
Regulations clarifying the deductibility of certain expenses that are incurred by estates and non-grantor trusts;
Regulations regarding the limited deductibility of more than $10,000 in state and local taxes, and work-arounds involving charitable gifts and taxes paid by flow-through entities;
Final regulations regarding basis consistency between estate and person acquiring property from decedent;
Final regulations describing the circumstances and procedures under which an extension of time will be granted to allocate Generation Skipping Transfer Tax exemption;
Guidance regarding a private foundation's investment in a partnership in which disqualified persons are also partners;
Guidance regarding the excise taxes on donor advised funds and fund management;
Guidance on basis of grantor trust assets at death;
New guidance on user fees for estate tax closing letters;
Regulations regarding imposition of restrictions on estate assets during the six-month alternate valuation period;
Regulations regarding personal guarantees and the application of present value concepts in determining the deductible amount of expenses and claims against the estate;
Regulations regarding the use of actuarial tables in valuing annuities, interests for life or terms of years, and remainder or reversionary interests;
Final regulations on the exchange of property for an annuity contract; and,
Guidance on foreign trust reporting and reporting with respect to foreign gifts, and regulations relating to certain transactions between U.S. persons and foreign trusts.
Since Guidance Plans can impact the way business taxes are filed, how retirement income is calculated, and more, so understanding the guidance plan is critical to ensuring compliance and avoids tax penalties, the IRS seizure of property, and other issues. Please consult your tax professional about how this Priority Guide might affect your planning.