Tax News & Views Extended PPP Forgiveness Roundup

May 22, 2020

Brady Backs PPP Extension as Senate Falls Short on Fix – Jad Chamseddine, Tax Notes ($). “The bill, introduced by Reps. Chip Roy, R-Texas, and Dean Phillips, D-Minn., would allow businesses that take loans under the program to defer payroll taxes and would eliminate the 25 percent cap on non-payroll expenses for the purpose of calculating forgiveness.”

In Some States, 2020 Estimated Tax Payments Are Due Before 2019 Tax Returns – Katherine Loughead, Tax Policy Center. “While most states (with several exceptions) typically set their quarterly estimated tax payment due dates to match the federal government, some states have chosen to depart from the federal government when it comes to offering extensions for 2020 estimated tax payments.”

Thirteen states, and the District of Columbia, currently have the first and second quarter estimated tax payments coming due prior to the federal due date. Additionally, eights states currently have the Q1 due date as July 15th and the Q2 due date as June 15th.  

Some states chose to keep their first- and second-quarter estimated tax payment due dates in April and June in order to avoid shifting revenue from one fiscal year to the next, which could make it difficult for some states to close out fiscal year (FY) 2020 with a balanced budget. While April 15 has already passed, states in this situation may want to consider offering certain relief from penalties for underpayment of estimated taxes, especially those states that extended their tax year 2019 income tax filing deadline but did not extend their first- and second-quarter 2020 estimated tax payment deadlines.

Tax Convictions Up, Prosecutions Down in March – Frederic Lee, Tax Notes ($). “The number of tax-related convictions jumped 21.5 percent in March compared with the prior month, while the number of prosecutions for tax matters declined by 27.1 percent, according to new data published by Syracuse University.”

More information on IRS compliance can here found here.

IRS mobilizing 3,500 phone operators to answer stimulus questions – Sally Schreiber, J.D., Journal of Accountancy. “The IRS announced Monday it is hiring 3,500 new phone operators to answer taxpayers’ questions about economic impact payments (IR-2020-97). The IRS cautioned, however, that “telephone assistance and other services” will remain limited due to the COVID-19 pandemic. In March, the IRS announced that it was scaling back operations, closing offices, and having employees work from home in response to the pandemic.”

Federal Circuit Sides With Treasury in Energy Grant Dispute – Eric Yauch, Tax Notes ($). “Energy development companies that sued the government to obtain larger energy grants and ended up having to pay back millions they already received were handed a loss on appeal.”

The Federal Circuit held May 21 that California Ridge Wind Energy LLC and Bishop Hill Energy LLC said the development fees the companies cited as part of their costs bases used to determine the size of the grants were a sham because the payments were made to subsidiaries of its ultimate owner, Invenergy LLC.

Furloughs Create Complications for Compensation and Benefits – Stephanie Cumings, Tax Notes ($). “Employers should be wary of furloughing employees with deferred compensation arrangements if the move is likely to be permanent.”

Laura McDaniels of Baker Botts LLP stated:

Section 409A problems could arise if an employer tries to delay an employee’s termination date and thus delay the required payout under a deferred compensation plan by characterizing the absence as a furlough when there’s really no intention of bringing the employee back.


Buried In The HEROS Act, A Plan To Restore SALT Tax Deductions Could Add $1 Trillion In Housing Value – Donna Olshan, Forbes. “Mark Zandi, chief economist for Moody’s Analytics, estimated that the changes in the SALT tax curtailed home values from appreciating at a typical annual rate of 4%, costing $1 trillion in U.S. home value.”

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