Internal Revenue Bulletin: 2016-51
December 19, 2016
These proposed regulations relate to the establishment of dollar-value, last-in, first-out (LIFO) inventory pools by certain taxpayers that use the inventory price index computation (IPIC) pooling method. The proposed regulations provide rules regarding the proper pooling of manufactured or processed goods and wholesale or retail (resale) goods.
Interest rates: underpayments and overpayments. The rates for interest determined under section 6621 of the code for the calendar quarter beginning January 1, 2017, will be 4 percent for overpayments (3 percent in the case of a corporation), 4 percent for underpayments, and 6 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 1.5 percent.
This notice provides that the IRS will not assert that cash payments an employer makes to § 170(c) organizations (in exchange for vacation, sick, or personal leave that its employees elect to forgo) constitute gross income or wages of the employees under certain circumstances relating to Hurricane Matthew.
This notice provides guidance on section 45R of the Internal Revenue Code (Code) for certain small employers that cannot offer a qualified health plan (QHP) through a Small Business Health Options Program (SHOP) Exchange because the employer's principal business address is in a county in which a QHP through a SHOP Exchange will not be available for the 2016 calendar year (the counties, which are listed in the notice, are all in Wisconsin). With respect to those employers, this notice provides transition relief allowing employers to claim the credit by satisfying the pre-2014 rules.
The notice provides phased-in the application of the section 871(m) dividend equivalent regulations that were finalized in September of 2015. The notice provides that the section 871(m) regulations: (1) only apply to delta-one transactions in calendar year 2017, and (2) will apply to non-delta-one transactions beginning in calendar year 2018. The notice also provides phased-in enforcement of the section 871(m) regulations, including the qualified derivatives dealer rules.
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