Code Sec. 7623 gives the IRS discretion in its authority to pay whistleblowers ranging from 15 percent to not more than 30 percent of proceeds collected as a result of information provided by the informants. In Notice 2008-4, IRB 2008-2, 253, the IRS provided guidance regarding the filing of claims with the Whistleblower Office.

An article in Federal Tax Course Letter outlines the new guidance, which addresses a host of threshold filing requirements and outlines how informants should report information.

Rising delinquencies in residential mortgages and a weakening housing market have prompted legislators and regulators to apply increasing pressure on mortgage lenders to work out delinquent loans through modification rather than initiating foreclosure.

In an article in the Journal of Taxation of Financial Products, Will Cejudo, James Gouwar and Brooke Hintmann analyze the tax consequences, including areas where the tax treatment is unclear, for real estate mortgage investment conduits (REMICs) and REMIC investors holding a residential mortgage loan that undergoes a “significant modification.” They discuss exceptions, two recently released revenue procedures, and consequences for regular and residual interest holders.

The IRS’ Employee Plan Compliance Resolution System (EPCRS) allows taxpayers to “erase” and correct any operational errors and plan document errors that occur under qualified employee pension benefit plans, Code Sec. 403(b) plans, Simplified Employee Pension Plans (SEPs) and Simple Individual Retirement Account plans (Simple IRAs).

In an article in the Journal of Retirement Planning, Susan M. Szafranski explains the requirements involved in making voluntary and timely corrections.

In Swallows Holding Ltd., the Third Circuit Court of Appeals reversed the Tax Court with respect to when a foreign taxpayer must file its U.S. tax return in order to avoid a loss of deductions under Code Sec. 882(c)(2). The court of appeals upheld an IRS regulation requiring the return to be filed within a prescribed time limit.

The Swallows case could have a direct bearing on a number of high-profile international tax issues, such as the availability of foreign tax credits under the “technical taxpayer” rule and the treatment of stock options in a qualified cost-sharing arrangement, as James P. Fuller, Adam S. Halpern, and Timothy J. Fitzgibbon demonstrate in a column in the International Tax Journal.