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Dear members —
In "before times," we would have been five days from spiking the football and seven or so away from what would have been for many a well-deserved post-filing season vacation. We are not in "before times" and therefore, we are 96 days away from the (adjusted) end of the filing season.
DC feels a bit calmer in many respects. IRS, while beleaguered, is unburying itself, starting last weekend with a message from Commissioner Rettig to NAEA (see Saturday's special edition) and ending by backing up a truckload of good old-fashioned guidance (notices and a revenue procedure thrown in for good measure)). Details on yesterday's guidance are below.
While we appreciate guidance whenever and wherever we receive it, the week was rough on a number of fronts — as far as we can tell, IRS is no longer accepting faxed Forms 2848 or 8821 and assistance with any current enforcement issue is next to impossible to come by. EA participation in the PPP and EIDL (two acronyms, we should remind ourselves, that did not exist three weeks ago) small business relief program has been challenging as well.
The Commissioner (Rettig, not Gordon) last Friday wrote "by early next week we will have specific information available about how people can go online to provide [banking and 'zero' return] information." We have not seen this, but we have seen a raft of reporting (for instance, here) that appears to these eyes to be firmly on the spectrum between speculative at one end and fabricated at the other.
Politico reported yesterday, "... Mnuchin told lawmakers the online tool allowing people to upload their own direct deposit information, in case it's not already on file with the IRS, would also be up and running next week. Elsewhere both on and off the Hill, people watching the issue say the administration insists everything is on track for next week — or at the very least, they've heard nothing to suggest otherwise."
Still, at least one person monitoring the IRS said it would not be surprising if the agency, known for not taking a lot of risks, proceeded cautiously in getting the deposits out. And another cautioned just how much strain is on the IRS these days, between the working conditions and the amount of items on the agency's to-do list.
Finally, a reminder: We release midday messages on NAEA's members-only Facebook page as well as on the Member Community (a.k.a. WebBoard), so please follow us there. Otherwise, we have also created a members-only coronavirus resource page, where we store a variety of resources curated just for you. And for the while, Friday's E@lert will be, mostly, a recap of the week's coronavirus-related news plus a little extra, just to keep it interesting.
Robert Kerr, EA
Executive Vice President
IRS Extends More Deadlines
At the end of business yesterday, IRS dropped a trove of guidance. In Notice 2020-23, IRS expands the extended July 15, 2020, filing and payment deadlines to an array of trusts, estates, corporations, and other non-corporate filers. Anyone, including Americans who live and work abroad, may now wait until July 15. No late filing or late payment penalties, no interest will be due. The relief is automatic; affected taxpayers need not call IRS, file extension forms, or send letters/other documents.
The guidance amplifies earlier notices (Notice 2020-18, which moved filing and payment deadlines for individuals, and Notice 2020-20, which extended deadlines for gift and generation-skipping transfer tax). Further, the July 15 deadline now applies to:
The notice also provides relief with respect to specified time-sensitive actions due to be performed on or after April 1 and before July 15, 2020, including the time for filing all Tax Court petitions or filing a claim for refund.
- First and second quarter estimated tax payments
- The deadline for unclaimed refunds from 2016 tax returns
- Calendar or fiscal year partnership return filings (Forms 1065 and 1066)
- Exempt organization tax, payment, and return filings on Form 990-T.
But Wait, There Is More (Relief) — an NOL Cornucopia?
IRS yesterday afternoon also issued guidance (Rev. Proc. 2020-24) in response to CARES Act provisions related to net operating loss (NOL) carrybacks. More specifically, The CARES Act amended §172(b)(1) to provide a carryback of any NOL arising in a taxable year beginning after December 31, 2017, and before January 1, 2021, to each of the five taxable years preceding the taxable year in which the loss arises (the "carryback period").
As a result of the provision, "taxpayers take into account such NOLs in the earliest taxable year in the carryback period, carrying forward unused amounts to each succeeding taxable year." Skadden provided (before yesterday's guidance) an overview of the CARES Act provision, and reminds us the TCJA NOL changes (i.e., NOLs arising after 2017 generally cannot be carried back and when carried forward may offset no more than 80 percent of taxable income).
Notice 2020-26 extends the deadline for filing an application for a tentative carryback adjustment with respect to the carryback of a NOL arising in any taxable year beginning during CY18 and ending on or before June 30, 2019.
In uncertainty, EAs have opportunity to succeed and to help their clients succeed, too.
IRS Urges Taxpayers to Use Electronic Options
Finally, IRS in a press release (IR-2020-68) yesterday asked taxpayers and tax professionals to use electronic options "to support social distancing and speed the processing of tax returns, refunds, and payments."
The message, while understandably optimistic and reminding all that the e-file system is fully functional, includes a variety of unpleasant reminders:
- Certain IRS services, such as live assistance on telephones, processing paper tax returns, and responding to correspondence are extremely limited or suspended until further notice.
- All TACs remain temporarily closed.
- IRS is not processing paper tax returns.
- IRS phone lines supported by customer service representatives for taxpayers are not staffed.
- PPS is closed until further notice.
- CAF requests are not being processed (though, small solace, practitioners with e-Services accounts and prior authorization may access Transcript Delivery System to obtain prior year transcripts).
We are pleased to share that through NAEA's relationship with Wolters Kluwer, you have the ability to find in one place state tax filing relief. Once you log in (E@lert logs in through NAEA's website, via the member benefits tab), you will see "Coronavirus/COVID-19 Pandemic," and immediately beneath that, you will have access to a document that updates in real time.
Aside from our own resources, you may want to consider the following:
We note in particular:
- An interactive map from Akin Gump providing current information on state, county, and local government business closures in response to the coronavirus emergency.
- Steptoe & Johnson provides a state level tracker for COVID-19 regulatory responses.
- The Tax Foundation is tracking state legislative responses to coronavirus.
- The New York FY21 budget is signed, and includes COVID-19 relief while addressing Internal Revenue Code conformity. According to RSM, "New York has effectively decoupled from the federal interest expense limitation rules (§163(j)) enacted under the CARES Act for tax years beginning in 2019 and 2020."
- The California Franchise Tax Board has updated its COVID-19 FAQs. Note California is not conforming to CARES Act NOL changes.
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Everything but the Kitchen Sink
The sun is yet to rise on E@lert's shelter-in-place home office, yet when it rises it will rise on a Friday, and for this (among many other things) we are grateful. Since last we spoke, we have discovered the ancient math that sets the date of Easter and Passover; how Peeps are made; the difference between a Manhattan and a perfect Manhattan; and how to MacGyver a facemask from a coffee filter or t-shirt (and how MacGyver became a verb).
Else, nothing inspires like the greatest episode ever of The Office. And we suggest this piece (originally composed for Easter) for inspiration, and this song because sometimes the dial goes to 11, and, finally, this HRB podcast, a Guide for Working (from Home) Parents.
Otherwise, please consider this list of tax-related items, curated for America's Tax Experts®:
- File under "worth repeating": The Department of Labor last week issued guidance regarding administration of the Emergency Paid Sick Leave Act as well as the Emergency Family and Medical Leave Expansion Act. Miller & Chevalier provides context, and a direct link to the temporary rule.
- A new AICPA report provides nonauthoritative guidance addressing frequently asked audit and accounting questions related to coronavirus.
- Here is a fascinating Procedurally Taxing blog post on the hazards of creating tax policy and procedure on the fly, including a number of articulate, interesting observations on the struggles IRS computer programmers face.
- Forbes columnist Peter Reilly asserts IR-2020-59 confirms IRS is easing collections rules. While he concedes the release is not meaningful for people who arrange their lives to live on after-tax income, he also advises those engaged with collections to pay attention.
- BKD is the auditor for E@lert's alma mater, which is not really interesting but this COVID-19 guide provides a nice checklist for business leaders, including sections on cash flow planning and understanding relief options.
- The Department of Education yesterday releases $6.2 billion in CARES Act-related assistance for college students.
"Before you heal someone, ask him if he's willing to give up the things that make him sick."
— attributed to Hippocrates (460 BC — 370 BC), Greek physician
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NAEA E@lert | Volume 2: Issue 9
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