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Dear members —
... and another DC week for the record books. As we go to press, sources tell us Treasury and SBA are in the midst of a squabble on the Payroll Protection Plan rollout, even if heaven only knows how many small businesses have completed the SBA Form 2483 (rather unimaginatively, if intuitively, called the Paycheck Protection Program Application Form). At the same time, taxpayers and tax professionals are attempting to divine the half-dozen or so programs designed to provide capital to businesses throughout the country.
IRS stated Social Security recipients would need to file simple (though undefined) returns to claim economic impact payments (readers note the name — not stimulus payments). The next day — or was it the same day? — the agency (under tremendous pressure) walked back its initial plan and pivoted to a plan that would not require Social Security (and railroad retirement and similar) recipients to do anything. Which makes sense — if only because the agency was statutorily required to use the SSA 1099. Now *how* IRS is going to merge SSA information tout de suite with its own data is a head-scratcher (and why, we assume, IRS suggested an approach that was probably more administrable, though we at NAEA have known for years precious few people here in DC care how a provision fares when pushed out into the cruel, direct sunlight of reality.).
In sum, in the last week we have seen an announcement IRS would change its tune on e-signatures and electronic communications; news some 44,000 IRS employees are remote working (no, we do not believe that, either); and real guidance (a notice!) waiving "additions to tax for employers required to pay qualified sick/family leave wages required by the FFCRA." Oh, and NAEA found time to write Commissioner Rettig on an issue at the top of our priority list and place NAEA's chief advocates Jeff Trinca and yours truly on their first podcast.
Finally, a reminder: We release midday messages on NAEA's members-only Facebook page as well as on the Member Community (aka WebBoard), so please follow us there. Otherwise, we have also created a members-only coronavirus web 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.
Your partner in success ...
Robert Kerr, EA
Executive Vice President
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.
[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 issued Notice 2020-22, which waives additions to tax for employers required to pay qualified sick/family leave wages as mandated by the Families First Coronavirus Response Act (FFCRA). There is a bit to unpack here, but the notice states it applies to deposits of employment taxes (including withheld income taxes, FICA taxes, and Railroad Retirement Act taxes). The notice also applies to employment tax deposits reduced in anticipation of the credits with respect to the period beginning on March 13, 2020, (the date the president declared a disaster) and ending December 31, 2020.
IRS is also advising taxpayers of coronavirus-related scams (no, fraudsters have no sense of decency — but we already knew that). IRS details potential scams, including phone, email, text, or social media requests to confirm personal and/or banking information. Forewarned is forearmed ...
We know EAs have a multitude of concerns these days, most of which would not be addressable by IRS phone assistors anyhow, and 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), at the bottom right of the screen you will see "Coronavirus/COVID-19 Pandemic," and immediately beneath that, you will have access to a document that updates in real time. You will also be able to search for information from any state specifically.
Aside from our own resources, you may want to consider the following:
We note in particular:
- An interactive map from Akin Gump providing interactive current information on state, county, and local government business closures in response to the coronavirus emergency.
- The Tax Foundation is tracking state legislative responses to coronavirus.
- The New Jersey Division of Taxation provided guidance (scroll to bottom of page) on telecommuting and corporate nexus. The Division writes, "In the event employees are working from home solely as a result of closures due to the coronavirus outbreak ... no [nexus] threshold will be considered to have been met." Deloitte provides further context and a link to FAQs.
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Everything but the Kitchen Sink
Sometimes making it to Friday constitutes victory in and of itself. We have asked whatever happened to waterbeds; how to fold your fitted sheets; how to host Zoom meetings (including answers to the question, "Why do I look so terrible?"); and why you cannot stop streaming Seinfeld or Frasier or Bones (or, in E@lert's case, Cybill).
Else, nothing inspires like Ina Garten (and a cosmo in which one could swim the backstroke). Else, we suggest this song for inspiration, and this one because sometimes the dial goes to 11, and this HRB podcast on your mental health and your work.
Otherwise, please consider this list of tax-related items, curated for America's Tax Experts®:
- The Department of Labor on Wednesday issued guidance regarding administration of the Emergency Paid Sick Leave Act as well as the Emergency Family and Medical Leave Expansion Act. Miller & Chevalier provide context, and a direct link to the temporary rule.
- In addition, the Department of Labor yesterday announced CARES Act guidance on unemployment insurance, including pandemic unemployment assistance (PUA) for those not typically eligible for unemployment insurance, such as gig workers.
- Ten million Americans filed for unemployment in the past two weeks — as Politico notes, that is the entire population of Michigan.
- This just in: Speaker Nancy Pelosi is evidently pushing to remove the SALT limits as part of a new coronavirus relief package — she wants to repeal the provision retroactively for TY18 and TY19. This, dear readers, will be…well, let us just say profoundly difficult.
- KPMG is offering a free one-hour webinar on COVID-19 and nonprofits.
- Fortune on everything you need to know about the new 401(k) no-penalty withdrawals provided by the CARES Act.
- Finally, Politico asks economists to dig deeper into a tough issue: How to balance human lives against the overall economy.
"It is not that we have little time, but more that we waste a good deal of it."
— 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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