The IRS’s annual Priority Guidance Plan (PGP) provides a roadmap of key areas for the Treasury and the IRS. By comparing the 2023-2024 and 2024-2025 PGPs, we can gain insights into what to expect in 2025.
Key Takeaways:
- TCJA-Related Guidance Remains a Focus: Guidance on areas impacted by the Tax Cuts and Jobs Act (TCJA), such as subpart F and the Base Erosion and Anti-Abuse Tax (BEAT), continues to be a priority.
- Long-Standing Priorities: Areas where guidance has been long-awaited, like regulations under sections 871(m) and 987, are still on the list.
- New Focus Areas: The 2024-2025 PGP introduces new projects, such as guidance on Qualified Electing Fund (QEF) elections, OECD-consistent transfer pricing approaches, and information exchange agreements.
- Continued Emphasis on Key Issues: Topics introduced in previous years, including Global Intangible Low-Taxed Income (GILTI) rules, intangible development costs, and digital asset reporting, remain priorities.
International Tax Focus:
The international category within the PGP is further divided into subcategories:
- Deemed Inclusions from Foreign Entities: This area focuses on anti-deferral regimes like Subpart F and Passive Foreign Investment Companies (PFICs).
- Inbound Transactions: This covers taxation of investments in the United States by non-U.S. persons.
- Outbound Transactions: This addresses the taxation of U.S. persons receiving income from non-U.S. sources.
- Foreign Tax Credits (FTCs): This focuses on rules related to foreign tax credits, including those related to the Global Anti-Base-Erosion (GLOBE) rules.
- Transfer Pricing: This covers guidance on how multinational companies price transactions between related entities.
- Sourcing and Expense Allocation: This addresses rules for determining the source of income and allocating expenses.
- Other: This catch-all category includes various other international tax issues.
Changes from the Prior Year:
- Removed Projects: Projects are removed from the PGP when they are completed or no longer priorities.
- Added Projects: The 2024-2025 PGP includes several new projects, such as guidance on QEF elections, OECD-consistent transfer pricing approaches, and information exchange agreements.
What This Means for Taxpayers:
The PGP provides valuable insights into the IRS’s priorities for the coming year. Taxpayers can use this information to:
- Anticipate potential changes to the tax law.
- Plan for potential tax audits and examinations.
- Stay informed about developments in international tax law.
Disclaimer:
This information is for general knowledge and informational purposes only and does not constitute legal or tax advice. Please consult with a qualified tax professional for guidance on your specific situation.
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