July 2, 2020
Publication note: There will be no Roundups tomorrow, July 3, or Monday, July 6, as Eide Bailly takes off to celebrate Independence Day. If something big happens, though, we'll be on it! Have a great Fourth.
House Passes PPP Extension, Infrastructure Package - Jad Chamseddine, Tax Notes ($). "By unanimous consent, the House passed S. 4116 on July 1 to extend the small business loan program through August 8, sending it to President Trump’s desk hours after the Small Business Administration stopped accepting loan applications."
House Passes Extension of Paycheck Protection Program - Natalie Andrews, Wall Street Journal. ($) "The bill passed the House with no objections on Wednesday and now heads to the president’s desk for a signature. The White House hasn’t said whether President Trump supports the bill."
TIGTA Will Audit IRS Over Decision to Send Outdated Notices - Alexis Gravely, Tax Notes ($). "Inspector General J. Russell George said his office is concerned that approximately 1.5 million taxpayers received balance-due notices with an incorrect due date, according to a June 30 letter to House Ways and Means Committee Chair Richard E. Neal, D-Mass., and Oversight Subcommittee Chair John Lewis, D-Ga."
Treasury Goes Back to Old Rules for Housing Credit Compliance - Eric Yauch, Tax Notes ($). "The government has reversed course and is now reverting to earlier sample-size requirements that are used for compliance monitoring when low-income housing tax credits are being sought."
Link to Proposed Regulations: REG-123027-19. Eide Bailly has specialists to help with affortable housing compliance.
IRS Extends Tax Filing Deadline For Victims Of April Tornadoes - Kelly Phillips Erb, Forbes. "Now, the Internal Revenue Service (IRS) has announced that victims of the April tornadoes, severe storms, and flooding that took place in parts of Mississippi, Tennessee, and South Carolina, will have until October 15, 2020, to file various individual and business tax returns and make tax payments."
Mississippi Enacts Marketplace Facilitator Law - Lauren Loricchio, Tax Notes. "With the legislation, Mississippi joins most other states, which have adopted marketplace facilitator legislation. Florida and Missouri are the remaining states with a sales tax that have yet to do so."
If you are selling into other states, it's easy to trigger collection liability. Having to come up with unpaid sales taxes for several years can be painful.
Related: Sales Tax Reform: Impact of Wayfair Decision FAQ.
Appeals Court Rules Trust Taxable on California-Source Income - Andrea Muse, Tax Notes ($). "The California Court of Appeal, First Appellate District, held June 29 in Steuer v. Franchise Tax Board that the state statute requiring apportionment of trust income based on the residency of the trustees applies only to non-California-source income, reversing the lower court."
COVID-19 Pandemic Could Slash 2020-21 State Revenues By $200 Billion - Lucy Dadayan, TaxVox. "Personal income and general sales taxes, which represent about two-thirds of tax revenues in the 27 states with updated forecasts, are projected to decline drastically through fiscal 2021. Corporate income taxes, the third major source of state tax revenues, also are expected to fall sharply."
"Every state that has updated its forecast predicts a significant decline in revenue."
6 tax tasks to take care of by July 15 - Kay Bell, Don't Mess With Taxes. "1. Get an extension to file."
Bozo Tax Tip #10: Email Your Social Security Number - Russ Fox, Taxable Talk. "Seriously, use common sense! Would you post your social security number on a billboard? That’s what you’re doing when you email your social security number."
The same applies for attaching documents with your SSN to an e-mail. Use a secure portal or secure encryption to transmit tax things electronically.
An Entrepreneurial Spirit: A Conversation With Beverly Winstead - Marie Sapirie, Tax Notes Opinions Blog. "Tax Notes Federal contributing editor Marie Sapirie interviews Beverly Winstead — attorney, instructor, and entrepreneur — about her path to becoming a lawyer and community fixture for low-income taxpayers."
PPP and PATC Developments - Roger McEowen, Agricultural Law and Taxation Blog. "The IRS recently proposed regulations clarify that the reduction of the personal exemption deduction to zero for tax years beginning after 2017 and before 2026 does not affect an individual taxpayer’s ability to claim the PATC."
Digital Tax Deadlock: Where Do We Go from Here? - Scott Hodge and Daniel Bunn, Tax Policy Blog.
The French digital services tax has a 3 percent rate and applies to revenues connected to provision of a digital interface or advertising services based on users’ data. It only applies to businesses with more than €750 million in global revenues and €25 million in France. This model is being replicated in dozens of countries across the world.
The problem with this approach to taxation is twofold.
First, gross revenue taxation cannot be a proxy for corporate income taxation. Revenue taxes are regressive. If you have a 6 percent profit margin, the digital services tax is a 50 percent profits tax. If you have a 3 percent profit margin on your digital activities in France, the 3 percent digital services tax taxes all of that away, essentially a 100 percent profits tax. If you are running losses in France, you still have to pay the digital services tax. Just for context, the French corporate income tax rate is about 32 percent.
Beer Taxes in Europe - Elke Asen, Tax Policy Blog. "According to EU law, every EU country is required to levy an excise duty on beer of at least €1.87 per 100 liters (26.4 gal) and degree of alcohol content, translating to approximately €0.03 per 330ml (11.2 oz) beer bottle at 5% abv. As today’s map shows, only a few EU countries stick to the minimum rate; most have decided to levy much higher excise duties."
Hello, Germany. Alas, Finland...
IRS offers additional retail partners that accept cash payments for federal taxes - IRS Press Release:
The Internal Revenue Service today announced additional retail partners are accepting cash payments for federal taxes. This cash payment option is for individual and business taxpayers.
The IRS' continuing partnership with ACI Worldwide's OfficialPayments.com and the PayNearMe Company allows taxpayers to make a payment without a bank account or credit card at participating 7-Eleven stores, Ace Cash Express and Casey's General Stores nationwide.
Somehow I picture a college-age me coming in to Casey's with a bag of loose change found around my trailer and struggling to choose between my tax obligations and gas for my '74 Ford.
Apparently there are still parts isolated localities unfamiliar with Casey's breakfast pizza. Jonathan Curry in Tax Notes writes (my emphasis) ($):
Taxpayers without bank accounts or credit cards can now make tax payments in cash at participating 7-Eleven stores, Ace Cash Express stores, and Casey’s General Stores, a chain of gas stations in the Midwest...
It's interesting that Casey's requires an explanation, but Ace Cash Express speaks for itself.
Happy Independence Day! The Continental Congress voted in favor of Independence 244 years ago today. "The written Declaration of Independence was dated July 4 but wasn't actually signed until August 2."
So no reason to delay the fireworks. Have a great weekend!
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.