Tax Update Blog

Tax News & Views Biden's Relief Package Roundup

January 11, 2021 | Blog
By Daniel McNeil

Biden Set to Release Details of Major Pandemic Recovery Package – Jonathan Curry, Tax Notes. “In addition to funding for the distribution of COVID-19 vaccines and more federal aid to state and local governments, the package would call for “finishing the job” of providing qualifying Americans with a total of $2,000 in economic relief payments, Biden said. The IRS has already begun distributing the $600 checks that were enacted in mid-December 2020 in the Consolidated Appropriations Act, 2021”

Additionally, key changes could be made to the Paycheck Protection Program.

“Biden also suggested that he might push for tweaks to the Paycheck Protection Program, arguing that the Trump administration botched its implementation. “Big, well-connected businesses jumped in front of the line and got more relief and got it faster,” while minority-owned and small, family-owned businesses “were often last in line,” he said.”

12 Tax Angles For Investors: What Will Survive The Democratic Congress? William Baldwin, Forbes. “Tax-hungry legislators may go after incomes over $400,000. But they will likely leave in place a rich collection of avoidance devices.”

PPP Second Draw Program Opens Week of January 11 – Adam Sweet, Eide Bailly. “This week, the government released updated guidance on the Paycheck Protection Program (PPP) (covering both the “first draw” program, and the recently enacted “second draw” program), including new interim rules governing the second draw loan program and a consolidated interim rule (with frequently asked questions) covering most facets of the first and second draw loan programs.”

 

Much of Second-Round Covid-19 Stimulus Money Has Been PaidRichard Rubin and Paul Kiernan, WSJ ($). “President Trump on Dec. 27 signed into law a roughly $900 billion coronavirus aid package that provides a second round of stimulus payments to households, and the money is already flowing. The Treasury Department said Jan. 7 that it had paid $130 billion of the estimated $164 billion total.”

IRS says it's working to redistribute stimulus payments sent to temporary accountsNaomi Jagoda, The Hill.

“The agency said in a statement that it has already sent over 100 million payments to taxpayers by direct deposit. However, some recipients who paid for tax-preparation services through their refund last year may have had their payments sent to temporary bank accounts that were established when they filed their 2019 return, rather than their personal bank accounts.”

Clarity on Whether Cryptocurrency Must be Reported on the FBARRuss Fox, Taxable Talk. “A vexing question has been whether or not foreign cryptocurrency exchanges must be reported on the FBAR. At a conference in 2019, a representative from FINCEN said no; however, the instructions on the FBAR imply they should be reported.”

FINCEN issued Notice 2020-2:

“Currently, the Report of Foreign Bank and Financial Accounts (FBAR) regulations do not define a foreign account holding virtual currency as a type of reportable account. (See 31 CFR 1010.350(c)). For that reason, at this time, a foreign account holding virtual currency is not reportable on the FBAR (unless it is a reportable account under 31 C.F.R. 1010.350 because it holds reportable assets besides virtual currency). However, FinCEN intends to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account under 31 CFR 1010.350.”

Carried interests regulations are finalized – Sally P. Schreiber J.D., Journal of Accountancy. “The IRS posted final regulations (T.D. 9945) on the tax treatment of carried interests under Sec. 1061. In response to comments, the final regulations make changes to the proposed regulations (REG-107213-18) that were issued in August.”

 

IRS says it did a pretty good job in a COVID-affected year – Kay Bell, Don’t Mess With Taxes. “That's the assessment from IRS Commissioner Chuck Rettig as his agency released its annual progress report, Internal Revenue Service Progress Update/Fiscal Year 2020 – Putting Taxpayers First.”

The report highlights what the agency accomplished in connection the IRS' six strategic goals:

  1. Empower and enable all taxpayers to meet their tax obligations.
  2. Protect the integrity of the tax system by encouraging compliance through administering and enforcing the tax code.
  3. Collaborate with external partners proactively to improve tax administration.
  4. Cultivate a well-equipped, diverse, flexible and engaged workforce.
  5. Advance data access, usability and analytics to inform decision-making and improve operational outcomes.
  6. Drive increased agility, efficiency, effectiveness and security in IRS operations.

Roth or Traditional 401k: Which Plan is Right for You? Eide Bailly.

When deciding between Roth vs 401k saving plans, several factors need to be addressed.

  • What are the terms of a company’s employer-match scheme?
  • Is a higher contribution limit necessary?
  • What are the penalties for early withdrawals?
  • Is the potential for company advancement high?
  • Will you have the option to convert a traditional 401k to a Roth 401k at a later date?

 


Stay informed!


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.