On April 8, 2020, the Internal Revenue Service (IRS) issued Rev. Proc. 2020-23 in response to the Coronavirus Aid, Relief and Economic Security (CARES) Act. Rev. Proc. 2020-23 eases restrictions on partnerships’ ability to file amended tax returns and issue amended Schedules K-1 in order for their partners to avail themselves of the retroactive tax relief provided by the CARES Act.
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 30 – April 3, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.
March 30, 2020: Economic impact payments will be sent out over the next three weeks. These payments will be distributed automatically, with no action needed by most people. However, some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment. The Treasury Department plans to develop a web-based portal for individuals to provide their banking information to the IRS for direct deposit of the economic impact payments.
March 31, 2020: The Treasury Department and the Internal Revenue Service launched the Employee Retention Credit to encourage businesses financially impacted by COVID-19 to keep employees on their payroll. The refundable tax credit is 50 percent of qualifying wages of up to $10,000 paid by an eligible employer. The credit is available to all employers regardless of size, including tax-exempt organizations, with two exceptions: state and local governments and their instrumentalities and small businesses who take small business loans.
April 1, 2020: The IRS issued corrections to T.D. 9889, which contains final regulations governing the extent to which taxpayers may elect the federal income tax benefits with respect to certain equity interests in a qualified opportunity fund. Such regulations, issued on January 13, 2020, contained errors that may be misleading to taxpayers. These corrections are effective as of April 1, 2020, applicable as of January 13, 2020, and will be published to the Federal Register on April 6, 2020.
April 1, 2020: The Treasury Department and the IRS announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment (“EIP”). The IRS will use the information on Form SSA-1099 and Form RRB-1099 to generate $1,200 EIPs for those who did not file tax returns in 2018 or 2019. Recipients will receive the EIP as a direct deposit or by paper check, just as they would normally receive their benefits.
April 2, 2020: The IRS issued a warning about COVID-19 related scams. The IRS reiterated that the IRS will not to call you to verify or provide your financial information so you can get an EIP or your refund faster. Taxpayers should also be on the lookout for emails, text messages, websites and social media messages that request money or personal information. Scammers may emphasize the words “stimulus check” or “stimulus payment.” The official term is “economic impact payment.
April 3, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Emily Mussio [...]
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Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 23 – 27, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.
March 23, 2020: The US Tax Court cancelled trial sessions from May 4, 2020 through June 29, 2020 due to the COVID-19 outbreak. For further discussion, see here.
March 23, 2020: The IRS updated Publication 946, “How to Depreciate Property”, for use in preparing 2019 tax returns. The updated publication notes the dollar amount in effect for tax IRC Section 179 expensing and the retroactive extension for 2019 and the expiration of certain depreciation at the end of 2020.
March 23, 2020: Final regulations under IRC section 901(m) were released that deal with transactions that generally are treated as asset acquisitions for US income tax purposes and either are treated as stock acquisitions or are disregarded for foreign income tax purposes. These regulations are necessary to provide guidance on applying section 901(m). These regulations affect taxpayers claiming foreign tax credits.
March 24, 2020: The IRS published Questions & Answers (Q&As) regarding the federal income tax filing and payment extension to July 15 to the COVID-19 outbreak. The Q&As provide supplemental information from Notice 2020-18. For further discussion, see here.
March 25, 2020: The IRS announced the “People First Initiative” in response to the COVID-19 outbreak to assist taxpayers in ways such as easing payment guidelines and postponing compliance actions. For further discussion, see here.
March 25, 2020: The IRS released guidance on Forms 8985 and 8986, Part II, Item G, to enter the date the audited partnership originally furnished the Forms 8986 to its partners.
March 27, 2020: The IRS announced Erin M. Collins will be the National Taxpayer Advocate and lead the Taxpayer Advocate Service, an independent organization within the IRS. Collins will start as the National Taxpayer Advocate on March 30, 2020, ahead of the original scheduled start date, due to the COVID-19 outbreak.
March 27, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Emily Mussio in our Chicago office for this week’s roundup.
Yesterday, the Internal Revenue Service (IRS) announced in a memorandum to all Large Business & International (LB&I) division employees that it was suspending the normal Information Document Request (IDR) procedures. The letter suspends enforcement until July 15, 2020; however, LB&I managers will have the discretion to continue with the IDR enforcement process when in their judgment the interests of tax administration warrant (e.g., cases with short statutes, listed transactions or fraud development). The memorandum, however, does not tell examining agents to stop issuing IDRs or working on their cases as the suspension relates only to enforcement of IDRs.
Practice Point: The suspension of the IDR enforcement procedures is welcome news to taxpayers with ongoing audits. With tax professionals displaced in their homes while mandatory self-isolation continues, meeting IDR deadlines has been challenging. We suggest, however, that taxpayers try to continue to work on their responses to IDRs the best they can so that when the world goes back to normal, responding to IDRs will not be high on the list of things to be done.
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 16 – 20, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here.
March 17, 2020: The IRS published Rev. Rul. 2020-9 to provide various prescribed rates for federal income tax purposes for April 2020.
March 18, 2020: The US Tax Court announced that it will close effective March 18, 2020 until further notice. Mail will be held for delivery until the US Tax Court reopens. Taxpayers may comply with statutory deadlines for filing petitions or notices of appeal by timely mailing a petition or notice of appeal, which will be determined by the United States Postal Service’s postmark or the delivery certificate of a designated private delivery service. The eAccess and eFiling systems will remain operational. For more information, see here.
March 19, 2020: The IRS released clarifications to the Instructions for Form 1065-X, Amended Return or Administrative Adjustment Request (AAR). The clarifications relate to the changes resulting from the Bipartisan Budget Act of 2015.
March 20, 2020: The IRS announced that the due date for paying taxes and filing returns is pushed back from April 15, 2020 to July 15, 2020 for individuals and businesses in response to the COVID-19 outbreak. Associated interest, additions to tax and penalties for late payment will also be suspended until July 15, 2020 and begin to accrue on July 16, 2020. This relief is automatic, no forms need to be filed to qualify. State filing and payment deadlines vary and taxpayers should consult the rules of each applicable state. For more information, see here.
March 20, 2020: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums and Chief Counsel Advice).
Special thanks to Emily Mussio in our Chicago office for this week’s roundup.
On March 13, 2020, President Trump issued an emergency declaration that directed Secretary Mnuchin to provide appropriate relief from tax payment deadlines to Americans who have been adversely affected by the COVID-19 pandemic. In response to this direction, the IRS issued Notice 2020-17. The Notice declares that all taxpayers have been affected by the emergency and gives all taxpayers an extension of time until July 15, 2020, to make certain income tax payments that would otherwise have been due on April 15, 2020 (however, at this time, tax returns must still be filed by the April 15 deadline absent an extension).
We outline the specifics.
On March 13, 2020, President Trump signed a Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Stafford Act”).
By invoking the Stafford Act, the President provides the Internal Revenue Service (IRS) and US Department of the Treasury (the “Treasury”) significant authority to offer tax relief to those in federally designated disaster areas. While it is not uncommon for a state or locality to be designated as an emergency or disaster area, the severity of the COVID-19 outbreak has required a national response. The President’s declaration has led the Federal Emergency Management Agency (FEMA) to declare an emergency in every state, territory and certain tribal lands. A list of each declaration is available on FEMA’s website and will be updated as more specific forms of relief are authorized.
As the fallout from the coronavirus (COVID-19) continues, the US Tax Court (Tax Court) has cancelled additional trial sessions. As we previously discussed, the Tax Court last week cancelled all trial sessions for March 2020. Now, the Tax Court has announced that all trial sessions for April 2020 are also cancelled. Additionally, although the Tax Court will remain open to receive mail and accept hand-delivered petitions, the Tax Court building will be closed to visitors.
The coronavirus (COVID-19) has now impacted the operations of the United States Tax Court (Tax Court). This morning, the Tax Court announced that after assessing all relevant factors relating to COVID-19, including travel and public health considerations, the trial sessions for March 16, 2020, March 17, 2020, March 23, 2020, and March 30, 2020, are cancelled. Orders are currently being issued in several cases reflecting the cancellations, which impact trial sessions in the following cities:
The Tax Court expects the parties to continue to work together to exchange information and address pending issues.
It remains to be seen if the Tax Court will cancel other trial sessions scheduled for April, May and June (the Tax Court does not hold trial sessions in July and August). The Tax Court’s website contains the full listing of trial sessions for the 2020 Winter Trial Sessions and the 2020 Spring Trial Sessions.
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