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Qualified Transportation Fringe Benefits in the Time of COVID – IRS Provides an Overview on Treatment of Unused Amounts and Changes to Elections

Prior to the pandemic, many employees used qualified transportation fringe benefits, such as receiving mass transit passes or paying for on-site parking on a pre-tax basis, to help defray the costs of getting to the office. As a result of the pandemic, many workers are working from home, with no need to pay for on-site parking or reap the benefit of employer-provided mass transit passes. The pandemic has also caused some employees to change their mode of transportation, with many deciding to forgo the use of mass transit to drive their own vehicles to work. A recent IRS information letter outlined some options available to employees whose use of qualified transportation has changed throughout the course of the pandemic. Under the example in the information letter, an employee was no longer using mass transit, and so, no longer needed to use compensation deductions to pay for mass transit passes. Instead,… Continue Reading

Increased User Fees for Certain Letter Ruling and Determination Letter Requests in 2021

The IRS recently issued Announcement 2020-14 (the “Announcement”), which provides notice of increased user fees for certain letter ruling and determination letter requests. The increased user fees will be included in Rev. Proc. 2021-4 and will be effective January 4, 2021. The Announcement also includes a chart showing the current user fee amounts and the increased amounts for 2021 for various types of letter ruling and determination letter requests. The Announcement is available here.

Taxpayers May Temporarily Submit Certain Requests Electronically to the IRS

The IRS released Rev. Proc. 2020-29, which modifies Rev. Proc. 2020-1, to temporarily allow taxpayers to electronically submit requests for letter rulings, closing agreements, determination letters (including those issued by the IRS Large Business and International Division), and information letters, which are under the jurisdiction of the IRS Office of Chief Counsel. The procedures for determination letters issued by the IRS’s Small Business/Self Employed Division, Wage and Investment Division, or Tax Exempt and Government Entities Division remain unchanged. Rev. Proc. 2020-29 describes the procedural, formatting, and technical requirements for any such electronic submissions and is effective April 30, 2020, until modified or superseded. Rev. Proc. 2020-29 is available here.

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