Tax News & Views American Rescue Roundup

January 22, 2021

A Breakdown of President Joe Biden’s “American Rescue Plan” Proposal for Additional COVID-19 Relief Legislation – Jay Heflin, Eide Bailly. “President Joe Biden recently unveiled a $1.9 trillion “American Rescue Plan” he wants Congress to turn into legislation and approve as soon as possible.”

Perhaps what's not included is just as important, no tax increases, yet. President Biden made the following statement on how he views tax increases:

“We can do it without punishing anyone by closing tax loopholes for companies that ship American jobs overseas or that allow American companies to pay zero in federal income taxes. Asking everyone to pay their fair share so we can make permanent investments to rescue and rebuild America is the right thing for our economy, it’s the fair thing and decent thing to do.”


Here’s What You Need to Know about the Updated PPP Programs – Adam Sweet, Eide Bailly. “Two distinct Paycheck Protection Programs (PPP) opened on January 19, 2021. First-time borrowers (including newly eligible borrowers) can once again apply under the first-round program. These applications can be for a completely “new” first draw loan or to “right size” their original loan.

Revised SBA Forms Released for Forgiveness of PPP Loans – Ed Zollars, Current Federal Tax Developments. “The Small Business Administration met the requirement to issue the one page form for PPP loan forgiveness by 24 days after the date of enactment of the Consolidated Appropriations Act, 2021.  The agency also published additional updated forms.”

Trump’s lawyers seek clarity about how tax-return case will proceed following Biden inauguration – Naomi Jagoda, The Hill. “President Trump's personal lawyers requested that a federal judge schedule a teleconference to discuss how a lawsuit about House Democrats' request for Trump's tax returns will proceed during the new administration and Congress.”


Tax Subsidies for R&D Expenditures in Europe – Elke Asen, Tax Policy Center. “Many countries incentivize business investment in research and development (R&D), intending to foster innovation. A common approach is to provide direct government funding for R&D activity. However, a significant number of jurisdictions also offer R&D tax incentives.”

The U.S. and many states also offer strong R&D tax credits. Contact the Eide Bailly Tax Incentives team today if your company is performing R&D activities.

Taxpayers need clarity on coordination of ERC and PPP loans – Alistar M. Nevius, J.D., Journal of Accountancy.

“After the recent enactment of the Consolidated Appropriations Act, 2021 (CAA 2021), P.L. 116-260, taxpayers who obtained loans under the Paycheck Protection Program (PPP) are also eligible to claim the employee retention credit (ERC) but need guidance on how the provisions interact. The AICPA on Friday sent a letter to Treasury and the IRS recommending that such guidance state that the filing of a PPP loan forgiveness application is not an election by the taxpayer to forgo the ERC for the wages reported on the application that exceed the amount of wages necessary for loan forgiveness.”

3 Tax Numbers Employees Need To Know In 2021 – Bruce Brumberg JD, Forbes. “January can be a hectic month, but don’t forget basic tax planning for 2021. At the start of each year, key numbers in many tax-law provisions are adjusted for inflation.”


Anyone now can get special IRS-issued PIN to thwart tax identity theft – Kay Bell, Don’t Mess with Taxes.

“Here are some key things the IRS says all of us interested in an IP PIN need to know about the process:

  • It is a voluntary program.
  • There is no cost.
  • You must pass a rigorous identity verification process.
  • Spouses and dependents are eligible for an IP PIN if they can verify their identities.
  • An IP PIN is valid for a calendar year.
  • An IP PIN is used only on Forms 1040, 1040-PR and 1040-SS.
  • You must obtain a new IP PIN each filing season.
  • Correct IP PINs must be entered on electronic and paper tax returns to avoid rejections and delays.”

Massachusetts Flavored Tobacco Ban Has Severe Impact on Tax Revenue – Ulrik Boesen, Tax Foundation. “Tobacco excise taxes are already an unstable source of tax revenue. Further narrowing the tobacco tax base by banning a portion of tobacco sales altogether could worsen the instability of this revenue source while driving up the costs of administration and law enforcement associated with the ban, especially if the lost revenue is made up by raising the tax rate on the remaining tobacco tax base.”

TIGTA finds problems with private tax collection levels, payment plans and security – Kay Bell, Don’t Mess with Taxes. “Four years ago, Congress forced the Internal Revenue Service to again use private collection agents (PCAs). This third deal with debt collectors came after the IRS ended two previous arrangements when they proved to be, shall we say, problematic.”

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