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The IRS is focusing its tax guidance efforts on health care reform, the repeal of the Defense of Marriage Act, and the Foreign Account Tax Compliance Act.

IRS Focusing on FATCA, PPACA, and DOMA Guidance

  • 7/31/2013

IRS Focusing on FATCA, PPACA, and DOMA Guidance

"Currently, [IRS chief] counsel and treasury are working on the next Priority Guidance Plan," said IRS Deputy Chief Counsel-Technical Erik Corwin, who provided a brief update on upcoming guidance projects and other IRS developments. Corwin replaced IRS Chief Counsel William Wilkins as the featured speaker at a July 24 lunch talk in Washington, DC.

"Of the things under the plan, probably the two most high-profile items, other than the issues surrounding political activity, are the Foreign Account Tax Compliance Act (FATCA) and the Patient Protection and Affordable Care Act (PPACA)," Corwin said. The IRS is working to finalize or update certain regulations previously released under FATCA and the PPACA. The implementation timelines for both laws had recently received extensions, which Corwin stated would enable the IRS to provide more detailed guidance.

In addition, the IRS is working to put forth guidance on the tax consequences of the U.S. Supreme Court’s decision in E.S. Windsor, which makes it mandatory for the federal government to recognize same-sex marriages sanctioned by the states. Corwin stated that he does not have a timeline for release of this guidance.


Corwin noted that the IRS had previously issued Notice 2013-43, which provided that there would be a six-month delay in the implementation timeline of FATCA. Specifically, the IRS will work on what he termed "coordination regulations," meaning a regulation that would apply consistent approaches for withholding. "It will include the details of the due diligence documentation reporting and withholding," he said.

Foreign Financial Institution (FFI) agreement draft language is also being actively worked on, Corwin stated.

The online registration portal will be open on a "practice basis" on August 19, Corwin said. Then, after January 1, 2014, institutions will be able to finalize their submissions and receive their global intermediary identification number (GIIN). The GIIN is required for financial institutions that need to demonstrate their FATCA compliance on an expedited basis.


"We continue to work on information reporting guidance, as well as finalization of the 4980H employer penalty regulations," Corwin said of the IRS’s progress on guidance under the PPACA.

Other guidance in this area includes possible follow-up guidance to the final regulations on the premium assistance tax credit. Proposed regulations on handling income and family size confirmations for the affordable insurance exchanges are nearing finalization, Corwin added.

Finally, the IRS is addressing numerous comments received in response to the regulations relating to the net investment income surtax. "We are in the process of trying to incorporate them into the final regulations," Corwin said.


Corwin provided information on the Supreme Court’s recent decision in Windsor, in which the Supreme Court struck down the Defense of Marriage Act (DOMA) as it conflicts with state law legalizing marriage between two persons of the same gender. "The implications of the decision stand across a wide variety of code provisions, ranging from general income tax provisions to state tax provisions to employee benefits. We are working hard to act judiciously to address those issues," Corwin said.

However, Corwin could not comment on when the IRS would release guidance on the Windsor decision. He stated in response to an audience question that the IRS is sensitive to concerns of tax practitioners and taxpayers over what consequences the decision might have on the upcoming open enrollment period for health plans. Nevertheless, he declined to comment on a time frame or on the type of guidance the IRS would ultimately release relating to DOMA.

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