The IRS Large Business & International (LB&I) division posted an LB&I directive* as instructions to LB&I examiners in the selection of timeshare industry issues for examination.
*According to the IRS, LB&I directives provide administrative guidance to LB&I examiners to allow for consistent tax administration and on matters relating to internal operations. However, LB&I directives do not establish an IRS position on legal issues and are not legal guidance.
The LB&I directive—LB&I-04-0818-013 (dated August 27, 2018, and released August 29, 2018)—provides instructions with respect to managing issues under section 1445 related to certain timeshare arrangements.
Specifically, the LB&I directive applies to examinations of LB&I taxpayers (that is, taxpayers with assets equal to or greater than $10 million) that failed to file Forms 8288, 8288-A or 8288-B for personal-use timeshare “upgrade” transactions that resulted in no realized gain to nonresident alien individuals.
Not all transactions involving timeshares are within the scope of this LB&I directive.
The directive is effective for all tax years ending on or before December 31, 2017, and for subsequent tax years.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.