The IRS has issued long-awaited and much-needed proposed reliance regulations on the operation of the two new surtaxes imposed under 2010 health care legislation: the 3.8 percent Net Investment Income (NII) Tax under Code Sec. 1411 and the 0.9 percent Additional Medicare Tax under Code Secs. 3101(b)(2) and 1401. Both surtaxes are scheduled to spring into full effect on January 1, 2013. The proposed reliance regs —and frequently asked questions (FAQs) on the IRS website— seek to address many of the gaps in application of these surtaxes that have been questioned by tax professionals, employers and taxpayers. At the same time, the proposed reliance regs create new questions about application of the surtaxes. The guidance on each of these new surtaxes is extensive and is immediately critical for affected taxpayers.