September 24, 2020
House Democrats Ponder Smaller Relief Package - Jad Chamseddine, Tax Notes ($):
House Democrats will likely release a smaller coronavirus relief package the week of September 28 if they don’t agree to a deal with Republicans before then, as pressure increases to extend the Paycheck Protection Program.
The new relief package could cost around $2.4 trillion and act as an updated version of the House-passed Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800), according to several Democrats.
Trump’s Tax Cuts for Coronavirus Losses Are a Clear Winner - Benjamin M. Willis, Tax Notes. "Why do some think it's unclear that section 165(i) gives the president the authority to relieve hurting taxpayers who suffered from a federally recognized disaster? Trump's disaster declaration reached the entire country, which is unprecedented. So is the tax relief granted by that declaration, including the ability to carry back losses on capital assets like stock and commercial real estate into the prior tax year."
Tax Strategies to Embrace, or Avoid, Before the November Election - Paul Sullivan, New York Times. "No one knows the outcome of the presidential race or how Congress could adjust the tax code next year. But there are changes taxpayers can make now, financial advisers say."
No reporting to pre-empt confusion: If 1099-Cs were issued for nontaxable forgiven PPP loans, the IRS says the paperwork could confuse the borrowers.
Even more worrisome is that the 1099-C copy sent to the IRS could trigger the issuance of notices to the taxpayers telling them, incorrectly, that they didn't report all their taxable income.
So the IRS on Sept. 22 issued Announcement 2020-12, saying that PPP lenders don't have to file 1099-C information returns.
But other debt cancellation is still reportable.
Promoting Healthy Businesses With Tax Credits - Marie Sapirie, Tax Notes Opinions Blog. "A new, temporary tax credit for businesses that purchase safety equipment, supplies, and training to mitigate employee and customer exposure to COVID-19 is one of the few widely popular pandemic relief provisions still under discussion in Congress. It isn’t a panacea for businesses that are still struggling to adjust and stay afloat, but it's an important step in fully reopening businesses that limited their operations."
IRS reminds taxpayers of the home office deduction rules during Small Business Week - IRS. "There are two basic requirements to qualify for the deduction. The taxpayer needs to use a portion of the home exclusively for conducting business on a regular basis and the home must be the taxpayer's principal place of business."
Iowa reminds taxpayers of due dates. The Iowa Department of Revenue failed to conform to the federal deadline extensions from the August 10 disasters, so Iowa third quarter estimated taxes are due on their usual September 30 due date.
They also explain the due dates for extended Iowa returns for 2019:
Order 2020-01 signed by the Director on March 19, 2020, changed the deadline for filing certain income tax returns with a due date on or after March 19, 2020, and before July 31, 2020, to July 31, 2020. As a result, tax year 2019 calendar year filers who qualify for the automatic six-month extension would have until January 31, 2021, to file their 2019 Iowa income and franchise tax returns.
The Iowa extension is automatic, but only available when at least 90% of the tax shown on the return has been paid in.
SUTA and the Single-Member LLC - Jason Dinesen. "But let’s look at why opting into paying Iowa unemployment tax is the right move."
Flee California Taxes, Fires & Prices? A Moving Checklist - Robert Wood, Forbes.
Recent Hacks and Scams that Could Threaten Your Cybersecurity - Eide Bailly. "This brief is intended to help you make sense of the ever-changing world of cybersecurity so you can avoid similar scenarios."
The Barrier of the Anti-Injunction Act for Low Income Taxpayers - Omeed Firouzi, Procedurally Taxing. "The court’s ruling here presents a frustrating predicament for taxpayers like Mr. Wright. When employers actively withhold more taxes than they should, workers are seemingly left with little recourse because of courts’ sweepingly broad interpretation of a decades-old statute."
Recent Changes in Top Personal Income Tax Rates in Europe - A. Kristina Zvinys, Tax Policy Blog. "Latvia and Lithuania moved from flat taxes on personal income to progressive tax structures. Poland introduced a solidarity surtax while Portugal and Sweden eliminated a surtax. Greece, Finland, the Netherlands, and Norway all made slight cuts to their personal income tax rates. Turkey added a new top personal income tax bracket."
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.