Tax Update Blog

Tax News & Views Socially-distant St. Patrick's Day Roundup

March 17, 2020 | Blog
By Joe Kristan

Accountants Ding IRS for Absence of Coronavirus Relief Guidance - Jonathan Curry, Tax Notes ($).  The article notes the impatience of tax practitioners for guidance on a possible extension of April 15 filing and payment deadlines, after the Treasury had hinted that an extension was forthcoming last week. From the article: 

“The AICPA appreciates the efforts being made by the Treasury Department and IRS to provide relief to the taxpaying public,” the AICPA’s Edward Karl said in the statement. “However, in light of the uncertainty and challenges caused by the spread of the Coronavirus pandemic, we are disappointed that the Treasury Department and IRS have yet to make an announcement on how relief would help millions of individuals and businesses, and to the CPAs who advise them,” he said.

The reporter also asked for my thoughts:

Joe B. Kristan of Eide Bailly LLP said the lack of detail about tax relief hasn’t had a major impact on his firm’s day-to-day operations, although there have been some concerns, like how to plan for seasonal workers or how to advise clients that expect to have a significant balance due on a tax payment that would ordinarily be due April 15, but whose businesses have dried up over the past month.

“Most small businesses are passthroughs, so that’s a pretty urgent issue that clients and practitioners need to plan around,” Kristan told Tax Notes. “It’s the ones with balances due and no income that are really up against it right now,” he added.

For now, we just wait on the IRS and proceed assuming April 15 will still be the deadline.

 

House of Representatives Bill Would Expand Paid Sick, Family, and Medical Leave to Address the Coronavirus Crisis - Erica York, Tax Policy Blog:

Measures like paid sick leave will help provide short-term stabilization for workers. However, this expansion of paid leave programs would come at a time when businesses are experiencing cash flow constraints as consumers stay home and businesses, such as restaurants and bars, are restricted in their operations.

To offset this increase in business costs, Division G of the bill would provide a quarterly tax credit to employers (and certain self-employed individuals) to offset the cost of paid sick leave and paid family leave. Specifically, employers would be eligible for a refundable tax credit of 100 percent of qualified sick leave wages paid and family leave wages paid against their employer-side payroll tax liability.

While important, a refundable tax credit may not be enough to overcome liquidity challenges of the current crisis for every business; for instance, a business required to pay sick leave may not have enough cash on hand at the time, even though it would get it back in the form of a credit later.

Paid leave doesn't help employees if the employer goes under.

 

Coronavirus Package With Tax Credits Stalls - Jad Chamseddine and Alexis Gravely, Tax Notes ($). Tax Notes also has an article from Martin Sullivan ($) discussing details of the proposal: "The personal and family health conditions that trigger employee eligibility for coronavirus sick and family leave are far from stringent."

 

Tax Day still is (for now) April 15, but IRS has new coronavirus tax webpage - Kay Bell, Don't Mess With Taxes. 

States Provide Tax Relief Amid Coronavirus Concerns - Lauren Loricchio, Tax Notes ($). Connecticut provides relief for March 15 due dates, joining Maryland and California. The AICPA is maintaining a list of state deadline measures here, but it hasn't been updated since March 13, which is eons ago in the Cororavirus era.

Alternate Valuation – Useful Estate Tax Valuation Provision - Roger McEowen, Agricultural Law and Taxation Blog. "The recent and dramatic decline in the stock market provides an opportunity for substantial estate tax savings for estate with the 'right' set of facts."

Using The EITC To Help Fight An Economic Slowdown - Elaine Maag, TaxVox. "The EITC is not a perfect policy response to an economic slowdown. But by advancing or increasing payments under the EITC, Congress could use an existing program to target anti-recessionary tax benefits to low- and moderate-income workers, and get the most bang for the fiscal buck."

 

Jury Finds Los Angeles Businessman Guilty in $1 Billion Biodiesel Tax Fraud Scheme - U.S. Department of Justice. "'The defendants claimed both EPA Renewable Fuel Standard (RFS) program credits and IRS tax credits for biodiesel fuel that did not exist, defrauding taxpayers out of hundreds of millions of dollars,' said Lance Ehrig, EPA Acting Special Agent in Charge."

Lesson From The Tax Court: The Two Postmark Rule And The Rule Of Law - Bryan Camp, TaxProf Blog. 

 

Not Comic Sans? Pandemic or no, the vast machinery of the tax system continues to grind away, making sure all is orderly when we return to normal. I take comfort from the March 12 Notice CC-2020-004 from the IRS Office of Chief Counsel:

In addition to the quality of their contents, the Office of Chief Counsel’s reputation for professionalism and integrity is reflected in the form and appearance of documents filed with the Tax Court, which are shared among the court’s judicial officers and staff and available to the public. In an era when most court papers are drafted, filed, and viewed electronically, the Courier font, originally designed in the 1950s for electric typewriters, is outdated. Accordingly, 14-point Times New Roman has been adopted as the standard font for all Tax Court documents.

I don't know. Courier has a sort of archaic majesty, where Times New Roman just seems stodgy. And 14 point? Well, I guess most Tax Court judges need bifocals, like me, so I can see that.


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This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.