August 7, 2020
NOL Flexibility Remains A Sticking Point In Virus Relief Bill - Alan K. Ota, Law360:
Senate Finance Chairman Chuck Grassley, R-Iowa, has been pushing a proposal in the Senate GOP pandemic plan to give farmers the option of either a five-year NOL carryback under the CARES Act or the exclusive two-year NOL carryback for farmers under the Tax Cuts and Jobs Act . The 2017 law allowed such losses to be carried forward indefinitely, but did not allow them to be carried back by most taxpayers, except farmers.
The article notes that the HEROES Act passed by the House would reverse the NOL Carrybacks and the suspension of individual business loss limits enacted in CARES Act. The article says that House Speaker Nancy Pelosi, D-California, said "I don't think we'll have that chance" with respect to the HEROES Act provisions.
White House Plowing Ahead on Unilateral Payroll Tax Suspension - Jonathan Curry and Jad Chamseddine, Tax Notes ($):
President Trump says he intends to move forward with his plan to circumvent Congress and temporarily suspend payroll tax collection via an imminent executive order.
Over the past week, Trump has resurrected his payroll tax cut proposal, which has twice been rejected by congressional negotiators. The move comes as lawmakers remain gridlocked over phase 4 coronavirus relief package negotiations, but it drew skepticism from observers regarding the legality and practicality of trying to provide such relief sans Congress.
The payroll tax proposal, outlined in a Wall Street Journal op-ed by Stephen Moore, would suspend collection of payroll taxes. While acknowledging that the president can't forgive the taxes unilaterally, the article says that it would pressure Congress to forgive the deferred payments.
Reasons to Consider GILTI Amid Release of Final Regulations - Shannon Lemmon and Andrew Walters, Eide Bailly. "Taxpayers should consider whether amended returns are warranted to obtain a federal or state tax refund on GILTI inclusions in years beginning after December 31, 2017."
Missing Or Wrong Stimulus Check? Help For Some Taxpayers Is On The Way - Kelly Phillips Erb, Forbes.
Treasury Response to Congress Further Increases Confusion Regarding Missing Stimulus Payments - Christine Speidel, Procedurally Taxing. "Congress continues to negotiate another stimulus package. Meanwhile, although the IRS accomplished a Herculean task in delivering stimulus payments to millions of Americans in April and May, uncertainties and problems stubbornly linger for some people."
Home office tax deduction still available, just not for COVID-displaced employees working from home - Kay Bell, Don't Mess With Taxes:
1. Can I claim my home office that I'm using since my employer closed down our regular workplace, but has us still doing our jobs remotely?
No. The IRS is blunt about this option and most of the pandemic's new salaried but work from home devotees: "Employees are not eligible to claim the home office deduction."
Good coverage of home office deduction basics.
The work-from-home tax crisis we have to see coming - Shaun Hunley, Accounting Today. "As we inch closer to the fall, and states start to operate with the specter of any further shutdowns looming overhead, along with the very real possibility of many of their workers becoming permanent telecommuters, business accounting could get much more complicated."
Failing to Keep Current After Obtaining an Offer in Compromise - Keith Fogg, Procedurally Taxing. "Nothing about the case surprises me but it does serve as a reminder of what happens when you fail to keep current after obtaining an offer in compromise. It also serves as a reminder that the OIC produces a contract, and the terms of that contract clearly obligate the taxpayers to timely file and timely pay for five years after the acceptance of the offer."
Related: What is the IRS Fresh Start Initiative?
Safe Harbor Plan Distribution Notices Updated by IRS to Reflect SECURE and CARES Act Changes - Ed Zollars, Current Federal Tax Developments. "The new documents have been updated to take into account changes to the law made by the SECURE Act and the CARES Act related to qualified retirement plans in Notice 2020-40."
Evidence Suggests that Tax Rates Influence Migration Decisions - A. Kristina Zvinys, Tax Policy Blog. "Individuals respond to taxes by changing their behavior. Hence, when there are tax differences between countries, some might respond by moving to a lower-tax area. For higher-income individuals, the benefits of moving as a result of higher taxes are greater because they have more income or wealth at stake."
The Future of the Proposed Carried Interest Regulations - Benjamin M. Willis and Monte A. Jackel, Tax Notes Opinions Blog. "Monte and Ben speculate on what the new regulations are expected to look like and provide their opinions on potential IRS overreaches likely to be overturned if potentially tenuous arguments are brought to court."
Revised Montana NOL Schedule For Tax Years 2018-2020 - Montana Department of Revenue. "As a result of the changes from the CARES Act to the treatment of NOLs for tax years 2018, 2019, and 2020, the department updated the Montana Net Operating Loss for Individuals, Estates and Trusts Schedule and it is now available to recalculate the NOL for 2018 and/or 2019 to carry back to previous years. Taxpayers will also use this schedule to calculate their 2020 NOL."
Iowa Sales Tax Holiday is today and tomorrow. The Iowa Department of Revenue has details of the two-day holiday "on select clothing and footware." Some basics:
- Exemption period: from 12:01 a.m. Friday through midnight Saturday.
- No sales tax or local option sales tax will be collected on sales of an article of clothing or footwear having a selling price less than $100.00.
- The exemption does not apply in any way to the price of an item selling for $100.00 or more
- The exemption applies to each article priced under $100.00 regardless of how many items are sold on the same invoice to a customer
- any article of wearing apparel and typical footwear intended to be worn on or about the human body.
"Clothing" does not include...
- watches, watchbands, jewelry, umbrellas, handkerchiefs, sporting equipment, skis, swim fins, roller blades, skates, and any special clothing or footwear designed primarily for athletic activity or protective use and not usually considered appropriate for everyday wear.
Priorities. Bloomberg Tax reports that a Texas man accused of using fraudulently getting $1.6 million of Paycheck Protection Program loans for sham businesses was detained pending trial on federal charges. The man allegedly used the funds "on a Lamborghini, Rolex, and strip club visits," but "is represented by a Houston public defender."
This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.
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