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Dear members —
The staff is wrapping up week six of remote work and every week we — probably much the same as you—start with the hope "this week will be lighter/better/more normal." And yet, reviewing the week's tax news, the week once again disappoints. Given the volume of information coming out of IRS, the continued limited IRS functionality, and tyranny of large numbers, this week did not meet our standard for better.
My definition of the tyranny of large numbers is this: Even a small fraction of a large number is still a large number. Thus, if IRS gets something 90 percent correct, which in most classrooms would score at least an A-, the 10 percent incorrect is often significant. Ten percent of IMF filers is 15.5 million, larger than the entire combined populations of Maine, New Hampshire, Vermont, Massachusetts, Connecticut, and Rhode Island.
You will read below on issues ranging from veterans payments to IRS Collection policy statements to the so-called "Phase 3.5" legislative relief ...
Please remember NAEA's members-only Facebook page as well as the Member Community (a.k.a. WebBoard), are hopping with information, questions, and community, so please follow us there. We also created a members-only coronavirus resource page, where we curated resources just for you.
Robert Kerr, EA
Executive Vice President
What about the Special Enrollment Exam?
Inquiring minds (as opposed to enquiring minds) wanted to know, so NAEA went hunting for answers. We discovered two things. First, Prometric test sites are closed through May 31, 2020. Second, a well-placed source at IRS confirmed the new set of exams are ready to go, so when Prometric test center doors open, candidates will be ready to go.
We have made inquiries about whether IRS will be extending the two-year test window (that is, the period of time a candidate may use to pass all three parts before the first test result becomes invalid). No response yet, though when we know, you will know.
IRS Continues to Produce Guidance
Here is a summary of what happened this week:
Also of note, an eagle-eyed National Tax Practice Institute™ (NTPI®) instructor noticed a memorandum from Fred Schindler, Director, Headquarters Collection SB/SE, in which he provides IRM 5.1.10 temporary COVID-19 Pandemic collection relief. The memo, while detailed, essentially directs collection employees to suspend most collection activities unless:
- IRS continues to update electronic impact payment (EIP) FAQs at its Economic Impact Payment Information Center, last revised on Wednesday.
- IRS also continues to update filing and payment deadline FAQs. The FAQs, last updated on Wednesday, supersede earlier FAQs posted on March 24.
- ACS reopened for both business and individuals, and some assistors are accepting faxed Forms 2848. To the best of our knowledge, POAs are not being posted to CAF and transcripts will be placed in e-Services secure mailboxes (SOR) only.
- IRS's mission critical functions announcement answers two key levy release questions.
- E@lert begs each of you: ACS availability is still limited, so please do not call with non-urgent issues or with non-collection issues.
- Based on a long conversation on NAEA's Facebook page (you should be there, btw), it appears refund speed on some Form 1040 filing is erratic or delayed, with Where's My Refund?" showing the returns as "processing." NAEA has a message into IRS about this and would like to see further clarification.
- IRS announced last Friday recipients of VA benefits will automatically receive EIP. Commissioner Rettig stated, “Additional programming work remains, but the step simplifies the process for VA recipients to quickly and easily receive these $1,200 payments automatically."
- IRS, through FAQs and revenue procedures, provided relief to nonresident aliens and foreign corporations who/that would not normally conduct business in the United States, but did so because COVID-19 disrupted their ability to leave.
- Rev Proc 2020-20 provides guidance on how to claim a medical condition travel exception to the substantial presence test (which is how nonresident aliens are/would be taxed as U.S. residents). KPMG provides context.
- Rev Proc 2020-27 waives for certain U.S. individuals in China (as of December 1, 2019) or otherwise outside of the U.S. (as of February 1, 2020) the residency and presence tests applying for §911 foreign earned income and foreign housing cost exclusions.
In the case of the former, the action must be approved by the director himself.
- There is a risk of permanent loss to the fisc due to the expiration of a statute or other exigent circumstance, or
- The taxpayer has agreed to an action.
In response to the depletion of SBA's loan and grant programs (see last Friday's E@lert), Congress this week passed the Paycheck Protection Program and Health Care Enhancement Act. The $484 billion package, which many in DC have dubbed "Phase 3.5," includes the following:
A summary of the Senate-passed bill is here.
- An additional $310 billion for the Paycheck Protection Program, $60 billion of which is specifically allocated for loans made by small lenders and community-based institutions.
- An additional $50 billion for the Economic Injury Disaster Loan (EIDL) Program.
- An additional $10 billion for the Emergency Economic Injury Grant Program.
Through NAEA's relationship with Wolters Kluwer, you have the ability to find in one place state tax filing relief. Once you log in through NAEA's website, 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:
- More states, including Maryland, Massachusetts, and Minnesota, are making COVID-19 exceptions to a variety of tax nexus issues. Maryland issued Tax Alert 04-14-20B, Massachusetts issued an emergency rule, and Minnesota issued FAQs.
- Please note, many states take unique approaches to the issue, so note carefully the guidance applying to your clients.
| || GOVERNMENT RELATIONS NEWS|
Everything but the Kitchen Sink
Since last we spoke, we have learned those who work from home generally work more, not fewer, hours — talk about blowing up work/life balance; the WSOP has been postponed due to COVID-19; and inhaling Lysol is a bad idea (scroll down to "Improper Use of Disinfectants").
Still, nothing inspires like Ellen DeGeneres (well, actually, Dora).
Otherwise, please consider this list of tax-related items, curated for America's Tax Experts®:
- File under "worth repeating": The Department of Labor 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.
- The SSA Commissioner, Andrew Saul, in a blog post provided an update to people who receive benefits from the Social Security Administration.
- We loved this Procedurally Taxing post on the potential — and in our humble opinion, likely — pending disaster of superseding returns. While superseding business returns may be e-filed, superseding individual returns may not. And IRS is not processing paper returns (instead, it has resorted to storing these documents).
- The Wall Street Journal notes a new IRA donation strategy may increase your tax savings later.
- Did you miss Roger Nemeth's timely, informative webinar earlier this week? Worry not, the webinar, entitled "What's Open at the IRS," will shortly be available online.
- Otherwise, NAEA has teed up three webinars next week alone, including two one-hour courses focused on coronavirus:
- April 28 — Penalty Abatement (with a focus on reasonable cause). Register here.
- April 29 — How the CARES Act Provides Immediate Relief Opportunities for Small Businesses. Register here.
- April 30 — Tax Changes Related to the CARES Act. Register here.
- In good news: Five NAEA members (John Dundon, EA; Phyllis Jo Kubey, EA; Ty Gaines, EA; Alan Pinck, EA; and Morris Armstrong, EA) vare quoted in a Reuters article on stimulus check confusion, each is identified as an enrolled agent, which is in our books MAGNIFICENT progress.
"Above all, be the heroine of your life, not the victim."
— Nora Ephron (1941 – 2012), American journalist, writer, and filmmaker
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NAEA E@lert | Volume 2: Issue 9
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