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S. Michael Chittenden

Special Counsel

Washington +1 202 662 5295 mchittenden@cov.com Download V-card

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Michael Chittenden practices in the areas of tax and employee benefits with a focus on the Foreign Account Tax Compliance Act (FATCA), information reporting (e.g., Forms 1095, 1096, 1098, 1099, W-2, 1042, and 1042-S) and withholding, payroll taxes, and fringe benefits. Mr. Chittenden advises companies on their obligations under FATCA and assists in the development of comprehensive FATCA and Chapter 3 (nonresident alien reporting and withholding) compliance programs.

Mr. Chittenden advises large employers on their employment tax obligations, including the special FICA and FUTA rules for nonqualified deferred compensation, the successor employer rules, the voluntary correction of employment tax mistakes, and the abatement of late deposit and information reporting penalties. In addition, he has also advised large insurance companies and employers on the Affordable Care Act reporting requirements in Sections 6055 and 6056, and advised clients on the application of section 6050W (Form 1099-K reporting), including its application to third-party payment networks.

Mr. Chittenden counsels clients on mobile workforce issues including state income tax withholding for mobile employees and expatriate and inpatriate taxation and reporting.

Mr. Chittenden is a frequent commentator on information withholding, payroll taxes, and fringe benefits and regularly gives presentations on the compliance burdens for companies.

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Advised a large multinational retailer on the development of a comprehensive Chapter 3 and Chapter 4 (FATCA) compliance program, registration of foreign financial institutions within its expanded affiliated group, and the application of FATCA regulations and intergovernmental agreements to entities and retirement plans located in several foreign countries.
Advised several large insurance companies on Form 1095-B reporting, including TIN solicitation requirements, error correction, identification of the employer sponsoring a group health plan, association plan reporting, VEBA reporting, multiemployer plan reporting, and other aspects of the regulations, and drafted extensive comments for submission to and testified before the IRS and Treasury Department regarding the challenges faced by insurers in soliciting and reporting the TINs of covered individuals.
Represented a large energy company in a multifaceted dispute with the IRS related to numerous alleged information reporting and withholding failures, including the imposition of intentional disregard penalties.
Advised a large financial company on the proper tax treatment of more than 200 different types of earnings and deductions for federal income tax withholding, FICA taxes and Federal Unemployment Tax Act (FUTA) tax purposes, as well as state income tax withholding and state unemployment insurance tax treatment in more than 20 states and numerous counties, school districts and cities.

Advised an auction service provider on the application of Section 6050W reporting to its business with a focus on whether it operates a third-party payment network.
Advised large employers on Form 1095-C and Form 1094-C reporting, including issues related to self-insured coverage, multiemployer plan reporting, reporting for nonemployee directors, retirees, and part-time employees, and TIN solicitation requirements.

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American Bar Association, Section of Taxation
The District of Columbia Bar, Taxation Section

Proposed Regulations Provide Guidance for Classification of Digital Content Transactions and Cloud Transactions

On August 9, 2019, Treasury and the IRS issued proposed regulations under section 861 of the Code to clarify how transactions involving digital content and cloud computing are classified for tax purposes. The new rules propose to revise and expand upon Treasury Regulation § 1.861-18 regarding digital content transactions and establish new Treasury Regulation ...

MyPayrollHR Scandal Serves as Reminder to Verify Employment Tax Deposits

Although the facts are still unfolding, recent developments surrounding the collapse of payroll firm MyPayrollHR serve as a reminder to employers to regularly verify the actions of payroll service providers. This should be a routine practice, regardless of the provider’s reputation and the longevity of the relationship. In particular, employers should open ...

IRS Plans to Resuscitate Long-Dead Form 1099-NEC

In the category of “everything old is new again,” the IRS announced in late July that it intends to require that nonemployee compensation (“NEC”) paid during the 2020 calendar year be reported on new Form 1099-NEC, instead of being reported in Box 7 of Form 1099-MISC. A draft of Form 1099-NEC was posted on the...… Continue Reading

IRS Releases Revised Draft 2020 Form W-4

Reminiscent of Kermit’s lament, “it’s not easy to be green,” it has not been easy to be the Form W-4 since personal exemptions were eliminated by tax reform in 2017. Two days after unveiling its new Tax Withholding Estimator, which is discussed in our post of August 6, 2019, today the IRS released “the second...… Continue Reading

IRS Releases Updated Tax Withholding Estimator

Today, the IRS unveiled its new Tax Withholding Estimator to help employees complete the Form W-4 and ensure that withholdings are sufficient to cover their income tax liability. The new calculator was previewed in the draft 2020 Form W-4. (See earlier coverage.) A near-final draft 2020 Form W-4 is expected to be released soon. Currently,...… Continue Reading

IRS Rules 23andMe’s Home DNA Kit Eligible for Partial FSA Reimbursement

In May, the IRS issued a private letter ruling to an individual taxpayer regarding the deductibility of 23andMe’s at-home DNA test kits under section 213(d) of the Code, which permits the deduction of medical expenses. In the ruling, the IRS determined that an allocable portion of the purchase price may be treated as a deductible medical...… Continue Reading

New Rule Permits Employers to Include Truncated TINs on Forms W-2 and Forms W-2c

Yesterday, the IRS released final regulations that aim to prevent identity theft by permitting, but not requiring, employers to truncate the taxpayer identification numbers (TINs) on copies of Forms W-2 and Forms W-2c furnished to employees. The regulations finalize proposed rules issued in 2017. Generally, this rule applies to Forms W-2 required to be filed ...

D.C. Starts Collecting Taxes to Fund New Paid-Leave Program

In 2017, the District of Columbia passed the Universal Paid Leave Amendment Act of 2016 (the “Act”), which called for the creation of a paid-leave program for private sector employees who work in D.C. Earlier this year, the D.C. Office of Paid Family Leave adopted final regulations to implement this new paid-leave program. One of...… Continue Reading

IRS to Launch FATCA Compliance Campaign for FFIs

Last week, the Acting Director of IRS of Field Operations for the LB&I Foreign Payments Practice (“FPP”) announced that the IRS will launch a compliance campaign this summer focused on foreign financial institutions (“FFIs”) that are not satisfying their reporting obligations under the Foreign Account Tax Compliance Act (“FATCA”). Speaking at a tax controversy ...

IRS Warns Withholding Agents to Consider FPP Correction Program to Avoid Penalties

Last week, Kimberly Schoenbacher, the Acting Director of Field Operations for the LB&I Foreign Payments Practice (“FPP”), sent a message to taxpayers who may be noncompliant with Chapter 3 and FATCA withholding and reporting: the IRS is actively honing in on Form 1042 nonfilers, Form 1042 failures, and Forms 1042 and 1042-S that do not...… Continue Reading

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S. Michael Chittenden

Representative Matters

Memberships and Affiliations

News and Insights (Showing 5 of 12) (Showing 12 of 12)

Proposed Regulations Provide Guidance for Classification of Digital Content Transactions and Cloud Transactions

MyPayrollHR Scandal Serves as Reminder to Verify Employment Tax Deposits

IRS Plans to Resuscitate Long-Dead Form 1099-NEC

IRS Releases Revised Draft 2020 Form W-4

IRS Releases Updated Tax Withholding Estimator

IRS Rules 23andMe’s Home DNA Kit Eligible for Partial FSA Reimbursement

New Rule Permits Employers to Include Truncated TINs on Forms W-2 and Forms W-2c

D.C. Starts Collecting Taxes to Fund New Paid-Leave Program

IRS to Launch FATCA Compliance Campaign for FFIs

How A Procedural Misstep Can Invalidate IRS Penalties

IRS Warns Withholding Agents to Consider FPP Correction Program to Avoid Penalties

Supreme Court Overturns Quill and Broadens Businesses’ Tax Collection Obligations

Accolades

Practices

Industries

Education

Georgetown University Law Center, J.D., 2009

Johns Hopkins University, B.A., 2000

Bar Admissions