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While our headquarters location (about a mile as the crow flies from IRS headquarters, also known as the Big House) brings a number of advantages, among them proximity to all the movers and shakers in the tax world, it also brings the challenges of urban living.
And while E@lert loathes saying the “m” word, we have been monitoring coronavirus and both federal and local responses to the pandemic. Those responses have been mixed, yet in the face of more and more closures and out of concern for our staff and a desire to do the right thing (#flattenthecurve), NAEA will be offering staff the option of remote working starting on Monday.
We believe we are well positioned to continue operations and will assess both our performance and the overall environment in DC as we continue to sail into uncharted waters.
Business entities are tough, and certainly different beasts from individuals. If you would like to know more about representing business taxpayers (and you know you do), tune in Thursday, March 19 at 2:00 P.M. ET to NAEA’s webinar, Advanced Preparation of Collection Information Statement (CIS) Forms, led by always fantastic Jessie Seaman, EA.
If you are not able to watch live, fret not. The recorded version will be available on demand.
During a hearing earlier this week on Capitol Hill, Treasury Secretary Steven Mnuchin suggested that the administration is considering extending the April 15 filing deadline due to the coronavirus crisis. While the reasoning behind this move has vacillated between “economic stimulus” to “lowering taxpayer anxiety,” like many of the proposals being floated currently, no one in the administration has bothered to ask the experts. NAEA’s members have expressed fairly consistent views to us that the current filing requirements allowing for an automatic extension to October 1 is good; and that if policymakers are going to provide some sort of filing relief, it should be in the form of waiving penalties and, possibly, interest.
Enrolled agents have expressed concerns over creating a “never-ending” filing season, of causing conflicts with state filing requirements, of ruining vacation plans, and of just generally throwing a hand-grenade in what has been a fairly uneventful filing season. In talking with reporters, NAEA has passed on our members concerns and suggestions. We have reached out to IRS to ensure senior staff is aware as well.
Else, we have the usual muddled mess in your nation’s capital. Both the Wall Street Journal (paywall) and USA Today are reporting the president stated, “I will be instructing the Treasury Department to defer tax payments without interest or penalties for certain individuals and businesses negatively impacted.” We are short on detail and as we went to press, here is what IRS’s news site looked like:
We will keep you posted, so when we know something, you will know something.
This week, the Democrat-controlled House of Representatives quickly passed a package of economic measures that included $2 billion more for state unemployment insurance programs, $1 billion in nutritional aid, and expanded paid leave for employees losing their jobs, and increases in Medicaid spending. Republicans, on the other hand, are expected to put forward a cut in payroll taxes for both employers and employees – some proposals floated in the press would put a moratorium on payroll taxes until after the November elections. Other GOP sources have talked about cuts in rates and incentives for investment.
The U.S. Senate has canceled its scheduled recess next week continue negotiations. As we go to press, House leaders (Speaker Nancy Pelosi (D-CA) and Ways & Means Chairman Richard Neal (D-MA), announced they reached a compromise with Secretary Mnuchin on what is being called the Families First Coronavirus Response Act (on top of last week’s $8.3 billion funding bill on which we reported last Friday). Among rumored provisions is a refundable tax credit to pay employers for 90 percent of sick leave for employees who have the virus.
A few items you may have missed:
- The New Jersey Department of Treasury announced the launch of a three-month Streamlined Business Reinstatement and Dissolution Program, which provides an opportunity for businesses revoked for failure to comply with the Garden State’s annual reporting requirements either to reinstate or close their businesses.
- We reported last week Oregon Department of Revenue posted two corporate activity tax (CAT) draft temporary administrative rules. The Tax Adviser provides a significant analysis for those who need to know more.
- The Arizona Department of Revenue reminds the Grand Canyon State of two tax credits available to residents who fall below minimum filing thresholds: a credit for excise taxes (e.g., gasoline, alcohol, and cigarettes) and a property tax credit of up to $500.
IRS this week released Notice 2020-15, which clarifies that until further guidance is issued, a high deductible health plan (HDHP) will not endanger its status (under §223(c)(2)(A)) merely because it provides health benefits associated with testing for and treatment of COVID-19 without a deductible or with a deductible below the minimum deductible (self-only or family).
IRS yesterday released final regulations increasing the offer in compromise (OIC) user fee to $205 and providing an additional avenue for the agency to waive the OIC application fee for low-income taxpayers (a provision of the Taxpayer First Act). The IRS summary is nicely done, and we liked this Bloomberg Tax piece (outside of the paywall).
E@lert notes with interest IRS’s response to a “second commenter,” who suggested, among other things, IRS should not be levying user fees on services that primarily benefit the general public. The agency is nothing if not dogged, and responded—much as it has to NAEA objections to enrolled agent user fees and SEE user fees—by simply asserting “the offer in compromise program confers a special benefit on identifiable recipients beyond those accruing to the general public.” By this logic, we still do not understand why IRS does o’t levy a fee on, for instance, audits and answering ACS calls.
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In the world outside of COVID-19, tomorrow is Pi Day (3/14) and this week marked the 42nd anniversary of The Hitchhiker’s Guide to the Galaxy. We also stumbled across a new dilemma (as if any of us need more) called the knapsack problem and, mercifully, the power of one pushup.
Else, we thought this week needed an anthem and provide this Tax Notes Talk podcast, suggesting states are finally seeking a tax truce in the wake of chasing Amazon HQ2.
Otherwise, please consider this list of tax-related items, curated for America’s Tax Experts®:
- Speaking of member benefits, the member forum on NAEA’s website is exclusively for NAEA members (full, associate, etc.), which should be your go-to place if you are stumped by anything that comes across your desk. A recent chain on NOL, EIC, and third-party sick pay, shows our community of professionals working together.
- IRS last week held an invitation-only Virtual Currency Summit (why yes, E@lert received an invite and NAEA’s legislative counsel, Jeff Trinca, represented EAs) and Forbes has produced a detailed summary of the proceedings.
- IRS recently updated its webpage devoted to passport revocation, which includes details on what debt qualifies for its partnership with the State Department.
- The New York Times discusses how the Internal Revenue Code over the years became the home for an untold number of social policy tools—a fascinating read for those of us in the preparation end of this business.
- Tax Notes Today reported on March 6 that IRS is considering “administrative changes to help taxpayers who may have made errors in their attempts to implement new tax and financial revenue recognition rules.”
- BNA Daily Tax Report’s Allyson Versprille evidently cornered IRS Chief Counsel Michael Desmond to quiz him on the agency’s reliance on FAQs for guidance (or “guidance” as we say). She quotes Desmond, “I don’t see them as the ideal way to deliver guidance, but they do serve a very important function…” Versprille also (correctly) notes “taxpayers can’t legally rely on such guidance and IRS can change FAQs without notice.”
- Early bird registration for IRS’ Nationwide Tax Forum opened March 1. The attendee code NAEA2020# will score you an additional $10 discount.
“We are often more frightened than hurt; and we suffer more from imagination than from reality.”
— Seneca (4 BC — AD 65), Roman Stoic philosopher, statesman, and dramatist
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NAEA E@lert | Volume 2: Issue 9
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