The IRS has issued temporary regulations (T.D. 9780) that explain how a partnership can opt in to the new partnership audit regime that was enacted in the Bipartisan Budget Act of 2015 (BBA). As enacted, the new audit rules will apply to partnership returns filed for tax years beginning after December 31, 2017. However, the new law allows partnerships to elect to apply the new audit regime to a return filed for a partnership tax year beginning after November 2, 2015 (the date of enactment of the BBA) and before January 1, 2018. A tax year within this period is identified as an "eligible tax year."

The IRS launched new online resources for service providers and participants in the sharing economy. Advances in telecommunications have fueled the growth of the sharing economy. More and more consumers are connecting with service providers for shared car services, apartments and rooms for short-term rentals, and some employment opportunities.

Under Code Sec. 469, passive losses can only be used to offset passive income. Taxpayers who have losses from a passive activity cannot use losses from a passive activity to offset nonpassive income, such as wages. A passive activity generally is an activity in which a taxpayer does not "materially participate." Passive losses that cannot be deducted must be carried over to a future year, where they can offset newly generated passive income.

The IRS is gearing up to outsource some taxpayer collection accounts to private collection agencies. Legislation passed in 2015 directed the IRS to resume working with private collection agencies. The revived program is expected to operate in a similar manner to past ones, with emphasis on taxpayer protections.

Employers, payroll providers prepare for accelerated filing deadlines

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) accelerated the due date for filing Form W-2, Wage and Tax Statement and Form W-3, Transmittal of Wage and Tax Statements, and any returns or statements required by the IRS to report nonemployee compensation to January 31. The change is scheduled to take effect for returns and statements required to be filed in 2017. At this time, many employers and payroll providers are reprogramming their systems for the accelerated due date.

To claim the EITC, a taxpayer must satisfy two tests with respect to earned income. First, the taxpayer must have some earned income. Additionally, the taxpayer's earned income must fall within certain ranges as the credit is subject to income phaseout. As the taxpayer's adjusted gross income (or, if greater, earned income) rises beyond the phaseout threshold, the credit is reduced according to a percentage phaseout, until it is eliminated at the completed phaseout amount.

The IRS is gearing up to outsource some taxpayer collection accounts to private collection agencies. Legislation passed in 2015 directed the IRS to resume working with private collection agencies. The revived program is expected to operate in a similar manner to past ones, with emphasis on taxpayer protections.

The IRS is set to launch its new voluntary certification program for professional employer organizations (PEOs), also known as employee leasing organizations, on July 1, 2016. A recently-released guidance package describes how PEOs can obtain certification to become "certified PEOs" (CPEOs).

Tax reform continues to be highly touted in Congress as lawmakers from both parties call for simplification of countless complex rules, overhaul of tax rates, and more. At times this year, President Obama and Congressional Republicans seem far apart on a way forward, but at similar times in the past, agreements have quickly and often surprisingly emerged, most recently in the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). As the November elections approach more closely every passing day, lawmakers from both parties and the President have a short window to agree on tax legislation. The weeks leading up to Congress' summer recess may be decisive.

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of May 2016.