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Tax Administration News

NAEA Acts on Behalf of Practitioners and Their Clients

On Tuesday, IRS released an interim guidance memorandum signed by Deputy Commissioner, Services and Enforcement, Sunita Lough, stating the Service is temporarily accepting "signature images" and "digital signatures" on certain IRS documents, and further, temporarily accepting submission and receipt of taxpayer documents via email (using SecureZip). More here.

E-signatures on Forms 2848 and 8821 are, pardon the pun, a signature issue for NAEA, which was largely responsible for the e-signature provisions in the Taxpayer First Act (TFA). By Thursday, NAEA's letter asking the Service to follow the TFA provisions was on Commissioner Rettig's desk. It follows a May 2019 letter on the same topic.

In Case You Missed It

Looks like IRS continues to make direct debits for existing installment agreements (IAs) and partial payment installment agreements (PPIAs). Enrolled agents (EAs) may modify existing agreements (assuming power of attorney) using the IRS installment payment application. There is a $10 mod fee (we are sure a relic from "before times"). One of our members suggests inputting a very low amount to determine the reduction IRS will allow. Meanwhile, IRS today added FAQs on this very issue.

And a possible headache on the horizon: Q1 estimated payments are due on July 15, while Q2 estimated payments (at least as of today) are due on June 15. At first blush, it seems a harmless quirk. As with many tax-related issues, the potential problems are real and complicated. For instance, as one of E@lert's favorite commentators Tony Nitti suggested in Law 360, "It's unclear how overpayments in the first quarter may or may not be applied to a payment for the second quarter." Further, the safe harbor provisions (e.g., paying 100 percent or 110 percent of prior year) require the 2019 return to be filed — which may not happen before the June 15 payment date. No Treasury advice as of yet, but when we know, you will know.

In uncertainty, EAs have opportunity to succeed and to help their clients succeed, too.

Treasury Recap

[N.b. this section is a recap of E@lert special coronavirus edition 7. Please review for details]

Treasury and SBA expect the Paycheck Protection Program (PPP) to launch today. Loans under this program will be forgiven as long as funds are used to keep employees on payroll and for certain other expenses. The PPP provides capital to businesses, without collateral, personal guarantees, or SBA fees. Notwithstanding these earlier-in-the-week assurances, banks and small businesses have many questions, and conversations with a well-placed DC banker confirmed that while financial institutions are willing, the rules (again, God is in the details) are not yet clear enough at least for some. This slide deck from Crowell & Moring is, we found, useful in understanding.

And this chart, from Tax Analysts, may be helpful, too:

IRS Wrap-up

IRS issued more

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