Take-Away: Each year the IRS and the Department of Treasury publish what they call their ‘Priority Guidance Plan’ (the Plan)  for the next 12 months. The most recent Plan was published in Notice 2022-21 (November 4, 2022) for the period that runs from July 1, 2022 to June 30, 2023. There are over 205 guidance projects in the Plan. Some of the  guidance projects that relate to estate and retirement planning are summarized below.

Retirement Benefits:

  1. Excise Taxes: Regulations under IRC 72(t) that relate to the 10% excise tax on early distributions.
  2. Allocation of Forfeitures: Regulations that relate to the timing of the use of allocation of forfeitures in qualified retirement plans.
  3. Electronic Notices: The electronic delivery rules and other guidance for providing applicable notices and making participant elections.
  4. RMDs: Final SECURE Act regulations that modify IRC 401(a)(9), i.e. required minimum distributions [the Temporary Regulations were published on 2/24/22.]
  5. 401(k) Plans: Regulations that relate to the SECURE Act modifications to the rules that govern 401(k) plans.

[There were 18 guidance priorities under Retirement Benefits under this Priority Guidance Plan.]

Exempt Organizations:

  1. DAFs: Regulations under IRC 4966 with regard to donor advised funds, including excise taxes on sponsoring organizations and fund management.
  2. DAFs: Regulations under IRC 4967 with regard to prohibited benefits, including excise taxes on donors, donor advisors, related persons and fund management.
  3. DAFs: Regulations under IRC 4958 with regard to donor advised funds and supporting organizations.
  4. DAFs: Regulations with regard to the public-support computation with respect to distributions from donor advised funds.

[There were 10 guidance priorities under Exempt Organizations under this Priority Guidance Plan.]

General Tax Issues:

  1. SALT Cap: Guidance on applying the state and local tax deduction cap under IRC 164.
  2. Charitable Deductions: Guidance under IRC 170 with regard to charitable contributions.
  3. Conservation Easements: Guidance under IRC 170 with regard to conservation easements, including façade easements.
  4. Small Business Deduction: Regulations under IRC 199A related to the determination of unadjusted basis immediately after acquisition (UBIA) of qualified property, the definition of qualified business income (QBI) and other issues.

[There were 31 guidance priorities under General Tax Issues under this Priority Guidance Plan.]

Gifts and Estates and Trusts:

  1. Basis Consistency: Final Regulations under IRC 1014(f) and IRC 6035 with regard to basis consistency between state and person who acquires property from a decedent. [Proposed and Temporary Regulations were published on March 4, 2016.]
  2. Step-up in Basis: Guidance with regard to the availability of IRC 1014 basis adjustment at death of the owner of a grantor trust described in IRC 671 when the trust assets are not included in the deceased owner’s gross estate for estate tax purposes.
  3. Claw Back: Regulations under IRC 2010 that address whether gifts that are includible in the gross estate of the donor should be exception from the special rule of Regulation 20.2010-1(c). [Proposed Regulations were published on April 27, 2022.]
  4. Portability Election: Guidance on portability regulatory elections under IRC 2010(c)(5)(A). This was done in IRB 2022-30 on July 25, 2022 as Revenue Procedure 2022-32.
  5. Estate Tax Valuation Limitations: Regulations under IRC 2032(a) with regard to the imposition of restrictions on estate assets during the six-month alternate valuation period. Proposed Regulations were published on November 18, 2011.
  6. Estate Tax Deductions: Final Regulations under IRC 2053 with regard to the deductibility of certain interest expenses and amounts paid under a personal guarantee, substantiation requirements, and the applicability of present value concepts to terming the amount that is deductible. Proposed Regulations were published on June 28, 2022.
  7. Marital Deduction: Regulations under 20.2056A-2 for a qualified domestic trust [QDOT] election on estate tax returns, updating ‘obsolete references.’
  8. GST Exemption Allocation: Regulations under IRC 2642(g) that provide guidance that governs the allocation of the GST exemption in the event that the IRS grants relief under IRC 2642(g) as well as address the definition of a generation skipping transfer trust under IRC 2632(c), and additionally provide ordering rules when a GST exemption is allocated in excess of the transferor’s remaining GST exemption.
  9. Timing of GST Exemption Allocation: Final Regulations under IRC 2642(g) that describe the circumstances and procedures under which an extension of time will be granted to allocate GST exemptions. Proposed Regulations were published on April 17, 2008.
  10. Tax on Foreign Gifts and Bequests: Final Regulations under IRC 2801 with regard to the tax imposed on U.S. citizens and residents who receive gifts or bequests from some expatriates. Proposed Regulations were published on September 10, 2015.
  11. Valuations of Retained Interests under Actuarial Tables: Regulations under IRC 7520 with regard to the use of actuarial tables in valuing annuities, interests for life or term of years, and remainder and reversionary interests. Proposed Regulations were published on May 5, 2022.

Conclusion: None of these guidance priorities come as a surprise as they have been covered over the past 10 months in my various ‘missives.’ From the past we know, however, that the IRS can surprise us with its interpretative Regulations, so each of these priorities need to be carefully watched for new surprises. That said, I always get a kick out of the IRS using the term priority, when many of these topics were temporarily addressed sometimes 10 to 14 years ago, yet they continue to be an IRS priority. I guess Treasury has a different view of what warrants being a priority than I do.