Document summaries for the week of March 23, 2020

Tax document summaries for the week of March 23–27, 2020, covering IRS procedure and state and local taxes.

ESTATES, TRUSTS & GIFTS

Deadlines extended for gift and generation-skipping transfer tax returns

The IRS is providing federal income tax filing and payment relief on account of the COVID-19 pandemic. In addition to the relief provided in Notice 2020-18, the IRS is providing relief to all taxpayers who have federal gift (and generation-skipping transfer) tax returns and payments due on April 15, 2020, by postponing such deadlines to July 15, 2020, and suspending associated interest, additions to tax, and penalties for late filing or late payment during the April 15 to July 15 period. Notice 2020-20 (3/27/20) (see related news story).

 

IRS PROCEDURE

Online FAQs address filing and payment postponements

The IRS posted a webpage answering questions about the federal tax filing and payment deadline extension announced in Notice 2020-18. Filing and Payment Deadline Questions and Answers (3/24/20) (see related news story).

IRS reduces operations in response to coronavirus pandemic

The IRS announced that it is scaling back its operations to focus on mission-critical activities during the coronavirus pandemic. IRS Operations During COVID-19 (3/24/20) (see related news story).

Tax Court cancels sessions through June

The Tax Court building remains closed and the court announced the cancellation of trial sessions around the country through June 29. The court released no opinions during the week of March 23. Tax Court Press Release (3/23/20).

IRS nails down effective dates for Families First Act

The IRS has clarified the effective dates with respect to the tax credits for qualified sick leave wages and qualified family leave wages required to be paid by the Families First Coronavirus Response Act, P.L. 116-127. According to the IRS, the credits apply to such wages paid for the period beginning April 1, 2020, and ending Dec. 31, 2020. Additionally, the days beginning April 1, 2020, and ending Dec. 31, 2020, will be taken into account with respect to the credits for qualified sick leave equivalents and qualified family leave equivalents for certain self-employed individuals. Notice 2020-21 (3/27/20) (see related news story).

IRS suspends Practitioner Priority Service, other help lines

The IRS announced that it was suspending the Practitioner Priority Service help line, along with the e-Services Help Desk line and the e-Services FIRE (Filing Information Returns Electronically) and AIR (the Affordable Care Act Information Return) system help desks, all until further notice. Tax Professionals webpage (3/26/20) (see related news story).

IRS adjusts compliance programs during COVID-19 emergency

The IRS announced various changes to its compliance programs as a result of the coronavirus pandemic. IR-2020-59 (3/26/20) (see related news story).

Chief Counsel’s Office explores exception to third-party contact rule

The Office of Chief Counsel advised that IRS contacts with non-IRS federal, state, local, or foreign government agencies or their employees are generally not considered third-party contacts (under Regs. Sec. 301.7602-2(f)(5)). However, an exception to this general rule exists if the IRS contact with another government agency concerns that other government agency’s business with the taxpayer (such as a taxpayer’s contract with or employment by the other agency). The Chief Counsel’s Office also found that the same rules apply to IRS verbal discussions with the non-IRS government employee. CCA 202013015 (3/27/20).

 

MISCELLANEOUS

CARES Act contains tax provisions

Legislation aimed at providing economic relief in the wake of the coronavirus pandemic includes many tax provisions. Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136 (3/27/20) (see related news story).

 

STATE & LOCAL TAXES

IRS issues nationwide average purchase prices for residences

The IRS issued guidance that provides issuers of qualified mortgage bonds, as defined in Sec. 143(a), and issuers of mortgage credit certificates, as defined in Sec. 25(c), with (1) nationwide average purchase prices for residences located in the United States, and (2) average area purchase price safe harbors for residences located in statistical areas in each state and territory. Issuers may rely on the guidance to determine average area purchase price safe harbors for commitments to provide financing or issue mortgage credit certificates that are made, or (if the purchase precedes the commitment) for residences that are purchased, in the period that begins on March 24, 2020, and ends on the date the safe harbors contained in the guidance are rendered obsolete by a new revenue procedure. Rev. Proc. 2020-18 (3/24/20).

Newsletter Articles

50th ANNIVERSARY

50 years of The Tax Adviser

The January 2020 issue marks the 50th anniversary of The Tax Adviser, which was first published in January 1970. Over the coming year, we will be looking back at early issues of the magazine, highlighting interesting tidbits.

PRACTICE MANAGEMENT

2019 tax software survey

This annual survey shows how CPAs rate the tax preparation software they used during last tax season and how it handled the recent tax law changes.