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).
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).
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).
Business meal deductions after the TCJA
This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.
Quirks spurred by COVID-19 tax relief
This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.