Dear members—
We are in unprecedented times, and NAEA understands timely, actionable information will be crucial for your success and the success of your clients. We are blocks from IRS, Treasury, and the Hill and continue to have a good line of sight on daily shifts in the landscape. Our goal is to sift all the news, separate the wheat from the chaff, and provide you the right amount of the right kind of information at the right time. Our goal will not be to be first, though we may on occasion be that. Our goal is to provide some sense of what the changes mean for enrolled agents, their clients, and tax administration. That will continue to be our goal as we all adjust to coronavirus-influenced tax administration.
Still, we understand you have received possibly many messages today, so we do not want our silence to be confused for inaction. Here is the net: other than a few high-level press conference utterances
,
the tax community is starved for useful, detailed information. Following is what we know. We promise we will provide you with solid, actionable information when we receive it.
TAX ADMINISTRATION NEWS
Tax Deadline Changes—and Other Coronavirus-related Changes
On Friday, President Trump
declared a national emergency
, which was viewed by many as necessary to move the filing deadline, using powers that rest in the executive branch.
Earlier this afternoon, Treasury Secretary Steven Mnuchin announced the administration is “giving individuals and many businesses 90 extra days. Individuals can defer up to $1 million. All you have to do is file your taxes. You’ll automatically not get charged interest and penalties.”
As we go to press, this statement is all we have. Notwithstanding what you may have read, it is *
not
* guidance, at least as enrolled agents understand the term, though it indicates where Treasury (and therefore we assume, IRS) is going. We expect Treasury and IRS will issue more information soon (though we do not know when—no one does), which we will share with you as soon as possible. We have also been sharing with DC influencers concerns our members are raising about a raft of issues.
Otherwise, we also know:
- IRS has provided a coronavirus-related link on its website. We keep looking there for more solid guidance. You may want to as well.
- IRS recently provided guidance with respect to high-deductible health plans (Notice 2020-15).
- California Franchise Tax Board on Friday announced special tax relief, which includes moving various filing and payment deadlines to June 15, 2020, while noting “FTB’s…extended due date may be pushed back even further if [IRS] grants a longer relief period.” Hat tip to Brian Pedersen, at the California Society of Enrolled Agents, who contacted FTB to address the omission of S-corps/C-corps, and the FTB responded, “The new extensions announced in the release apply to any business entity with a return or payment due between March 15 and June 15.”
Possible Federal Responses on Deck
On Saturday, the House passed a bill (the Families First Coronavirus Response Act), after negotiations with the administration. If the bill, which requires renegotiation for technical issues, becomes law, it would grant significant sick/family leave coverage to those at small or mid-sized businesses. The Joint Committee on Taxation has provided a detailed explanation of payroll credits as we went to print. We will share these later.
A
Washington Post
article clarifies
a taxpayer would not need to have the coronavirus to take advantage of the leave. The paid sick leave applies to anyone told to quarantine or attempting to get a test or preventative care, which is clearly a wide lane. IRS “will probably have to come up with an exact rule, but it’s clear Congress wants to avoid a situation in which everyone is trying to get a doctor’s note to qualify.”
While Congress still needs to pass this relief package, legislators are already discussing a third one. Some of the tax items under consideration are:
- Payroll tax moratorium or suspension
- One-time $1,000 payment to all adults
- A return of NOL carrybacks
- Additional payroll relief for independent contractors and taxpayers in the gig economy.
