From the Internal Revenue Service:

To help people facing the challenges of COVID-19 issues, the Internal Revenue Service has announced a sweeping series of steps to assist taxpayers by providing relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions.

"The IRS is taking extraordinary steps to help the people of our country," said IRS Commissioner Chuck Rettig. "In addition to extending tax deadlines and working on new legislation, the IRS is pursuing unprecedented actions to ease the burden on people facing tax issues. During this difficult time, we want people working together, focused on their well-being, helping each other and others less fortunate."

"The new IRS People First Initiative provides immediate relief to help people facing uncertainty over taxes," Rettig added "We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country."

These new changes include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions. The IRS will be temporarily modifying the following activities as soon as possible; the projected start date will be April 1 and the effort will initially run through July 15. During this period, to the maximum extent possible, the IRS will avoid in-person contacts. However, the IRS will continue to take steps where necessary to protect all applicable statutes of limitations.

"IRS employees care about our people and our country, and they have a strong desire to help improve this situation," Rettig said. "These new actions reflect just one of many ways our employees are working hard every day to assist the nation. We care, a lot. IRS employees are actively engaged, and they have always delivered for their communities and our country. The People First Initiative is designed to help people take care of themselves and is a key part of our ongoing response to the coronavirus effort."

More specifics about the implementation of these provisions will be shared soon. Highlights of the key actions in the IRS People First Initiative include:

Existing Installment Agreements –For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Deposit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.

New Installment Agreements – The IRS reminds people unable to fully pay their federal taxes that they can resolve outstanding liabilities by entering into a monthly payment agreement with the IRS. See IRS.gov for further information.

Offers in Compromise (OIC) – The IRS is taking several steps to assist taxpayers in various stages of the OIC process:

Pending OIC applications – The IRS will allow taxpayers until July 15 to provide requested additional information to support a pending OIC. In addition, the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer's consent.

OIC Payments – Taxpayers have the option of suspending all payments on accepted OICs until July 15, 2020, although by law interest will continue to accrue on any unpaid balances.

Delinquent Return Filings - The IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.

New OIC Applications – The IRS reminds people facing a liability exceeding their net worth that the OIC process is designed to resolve outstanding tax liabilities by providing a "Fresh Start." Further information is available at IRS.gov

Non-Filers –The IRS reminds people who have not filed their return for tax years before 2019 that they should file their delinquent returns. More than 1 million households that haven't filed tax returns during the last three years are actually owed refunds; they still have time to claim these refunds. Many should consider contacting a tax professional to consider various available options since the time to receive such refunds is limited by statute. Once delinquent returns have been filed, taxpayers with a tax liability should consider taking the opportunity to resolve any outstanding liabilities by entering into an Installment Agreement or an Offer in Compromise with the IRS to obtain a "Fresh Start." See IRS.gov for further information.

Field Collection Activities - Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.

Automated Liens and Levies – New automatic, systemic liens and levies will be suspended during this period.

Passport Certifications to the State Department – IRS will suspend new certifications to the Department of State for taxpayers who are "seriously delinquent" during this period. These taxpayers are encouraged to submit a request for an Installment Agreement or, if applicable, an OIC during this period. Certification prevents taxpayers from receiving or renewing passports.

Private Debt Collection – New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.

Field, Office and Correspondence Audits – During this period, the IRS will generally not start new field, office and correspondence examinations. We will continue to work refund claims where possible, without in-person contact. However, the IRS may start new examinations where deemed necessary to protect the government's interest in preserving the applicable statute of limitations.

In-Person Meetings - In-person meetings regarding current field, office and correspondence examinations will be suspended. Even though IRS examiners will not hold in-person meetings, they will continue their examinations remotely, where possible. To facilitate the progress of open examinations, taxpayers are encouraged to respond to any requests for information they already have received - or may receive - on all examination activity during this period if they are able to do so.

Unique Situations - Particularly for some corporate and business taxpayers, the IRS understands that there may be instances where the taxpayers desire to begin an examination while people and records are available and respective staffs have capacity. In those instances when it's in the best interest of both parties and appropriate personnel are available, the IRS may initiate activities to move forward with an examination -- understanding that COVID-19 developments could later reduce activities for an agreed period.

General Requests for Information - In addition to compliance activities and examinations, the IRS encourages taxpayers to respond to any other IRS correspondence requesting additional information during this time if possible.

Earned Income Tax Credit and Wage Verification Reviews – Taxpayers have until July 15, 2020, to respond to the IRS to verify that they qualify for the Earned Income Tax Credit or to verify their income. These taxpayers are encouraged to exercise their best efforts to obtain and submit all requested information, and if unable to do so, please reach out to the IRS indicating the reason such information is not available. Until July 15, 2020, the IRS will not deny these credits for a failure to provide requested information.

Independent Office of Appeals – Appeals employees will continue to work their cases. Although Appeals is not currently holding in-person conferences with taxpayers, conferences may be held over the telephone or by videoconference. Taxpayers are encouraged to promptly respond to any outstanding requests for information for all cases in the Independent Office of Appeals.

Statute of Limitations - The IRS will continue to take steps where necessary to protect all applicable statutes of limitations. In instances where statute expirations might be jeopardized during this period, taxpayers are encouraged to cooperate in extending such statutes. Otherwise, the IRS will issue Notices of Deficiency and pursue other similar actions to protect the interests of the government in preserving such statutes. Where a statutory period is not set to expire during 2020, the IRS is unlikely to pursue the foregoing actions until at least July 15, 2020.

Practitioner Priority Service – Practitioners are reminded that, depending on staffing levels and allocations going forward, there may be more significant wait times for the PPS. The IRS will continue to monitor this as situations develop.

"The IRS will continue to review and, where appropriate, modify or expand the People First Initiative as we continue reviewing our programs and receive feedback from others," Rettig said. "We are committed to helping people get through this period, and our employees will remain focused on these and other helpful efforts in the days and weeks ahead. I ask for your personal support, your understanding – and your patience – as we navigate our way forward together. Stay safe and take care of your families, friends and others."

The Coronavirus Aid, Relief, and Economic Security (CARES) Act:

The following is information we have been given on the CARES Act:

Coronavirus Congress Stimulus

The following is a summary of the Coronavirus Aid, Relief, and Economic Security (CARES) Act:

This post summarizes the developments of the most massive stimulus bill in American history, the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act will provide billions of dollars of relief to individuals, businesses, state and local governments, and the health care system suffering the impact of the COVID-19 coronavirus in the United States. Reuters has a summary posted here. Even though the program passed as a $2.2 trillion program, the impact is closer to $7 trillion based on direct relief, grants, and government-supported loans. Some of the key provisions include:

Tax Cuts for business and individuals – approximately $300 billion

 A refundable 50 percent payroll tax credit for businesses affected by the coronavirus, to encourage employee retention. Employers would also be able to defer payment of those taxes if necessary. This retention tax credit is for eligible employers that continue to pay employee wages while their operations remain fully or partially suspended as a result of specific COVID-19-related government orders

Loosened tax deductions for interest and operating losses

Suspension of penalties for people who tap their retirement funds early

Tax write-offs to encourage charitable deductions and encourage employers to help pay off student loans

Businesses and other employers’ programs

Over $400 billion in grants for industry sectors include airlines and travel, hospitals, and education

Nearly $400 billion to support American small businesses for essentials like salaries, occupancy costs, and utilities

Provisions that impact small business most

Employee Retention Payroll Tax Credit

Employers who are at risk for closure due to COVID-19 can receive a payroll tax credit against eligible payroll taxes for each calendar quarter equal to 50% of the qualified wages paid to each employee. The credit is available for an employer whose operations were fully or partially suspended due to a COVID-19 related shut-down order from an appropriate governmental authority, or if gross receipts declined by more than 50% when compared to the same quarter in the prior year

The eligible wages for an employee are up to $10,000 for all calendar quarters. Qualified wages include wages and health benefits paid to an eligible employee

This credit is also available to nonprofit organizations

Employers taking advantage of other credits or taking a small business interruption loan are not eligible for this credit

Delay of Employment Tax Payments

Deferral of the employer portion of payments of certain payroll taxes

The Act allows employers and self-employed individuals to defer payment of the employer share (6.2%) of the Social Security tax on wages through the end of 2020. Fifty percent of the deferred tax payments will be due by December 31, 2021, and the remaining portion due by December 31, 2022. Businesses who have debt forgiven from Payroll Protection Program loans (covered below) are not allowed to delay their payments

Net Operating Loss/Excess Business Loss Changes

Modification of net operating loss (NOL) and limitation on losses rules and deduction limitation on business interest

The Tax Cuts and Jobs Act limited net operating loss deductions. The CARES Act has amended those provisions to allow net operating losses incurred in 2018, 2019, and 2020 to be fully deductible, without the 80% limitation. The net operating losses from 2018, 2019, and 2020 are also allowed to now be carried back five years to allow businesses to claim refunds of taxes paid in prior years

Owners of pass-through entities are no longer subject to excess business loss provisions for 2018, 2019, and 2020. They will be able to take full advantage of pass-through losses, as available

Business Interest Deduction

The Tax Cuts and Jobs Act had limited the deductibility of business interest to 30% of taxable income. The allowable deduction under the CARES act has been increased to 50%

Qualified Improvement Property

Businesses will be able to write off all of the costs of certain interior renovations as 15-year property and eligible for expensing in nonresidential real property instead of using straight-line depreciation over a 39-year period

Qualified improvement property technical correction, allowing qualifying interior improvements of buildings to be immediately expensed rather than depreciated over 15 years

Available SBA programs covered in our earlier post Help Businesses and Families Now

Economic Injury Disaster Loans (EIDL), some information below

SBA Payroll Protection Program (PPP) under the CARES Act, covered next

SBA Express Bridge Loan (EBL)

SBA Regular 7(a) Loan Program

The Paycheck Protection Program will provide nearly $350 billion in loans and loan guarantees for the covered period of February 15, 2020, through June 30, 2020. Note that the use of PPP eliminates the use of SBA Economic Injury Disaster Loan (EIDL) below.

It will cover payroll costs (up to annual amounts of $100,000); continuation of group health care benefits; employee salaries, commissions, or similar compensation; mortgage payments; rent; utilities; and interest on any other debt obligations incurred before the covered period

It will extend eligibility to companies of 500 employees or less and 501(c)(3) nonprofits, veterans’ organizations, and tribal small business concerns

Sole-proprietors, independent contractors, and other self-employed individuals may also participate

Loan forgiveness is available up to the principal amount of the financing

Loan forgiveness would be reduced for employers who lay-off workers or reduce employee compensation except where employers rehire workers or pay additional wages to tipped workers

Loan forgiveness is available for payroll costs, mortgage interest rent, and utility payments

Forgiven loan amounts will not be included as gross income

The general formula is the lesser of the average total monthly payments for payroll costs during the one year before the date the loan is made, multiplied by 2.5; or $10 million

The CARES Act includes a “Marshall Plan” for the health care system to help provide needed treatment during the pandemic and financial assistance to state, local, tribal and territorial governments, as well as to private nonprofits providing critical and essential services

$150 billion for state, local and Native American tribal governments

$100 billion for hospitals and other elements of the healthcare system

$16 billion for ventilators, masks, and other medical supplies

$11 billion for vaccines and other medical preparedness

$4.3 billion for the U.S. Centers for Disease Control and Prevention

$45 billion in disaster relief

$30 billion for education

$25 billion for mass-transit systems

$10 billion in borrowing authority for the U.S. Postal Service

$1 billion for the Amtrak passenger rail service

$10 billion for airports

Economic Injury Disaster Loan

$4.5 trillion in loans to businesses, states and cities that can’t get financing through other means

The SBA Disaster program has been authorized and the SBA is actively taking applications at www.sba.gov/disaster

Expansion of the ways the Small Business Administration (SBA) can help small businesses, including allowing qualified SBA lenders to loan money directly to eligible customers, but there will be limited funding. Now is the time to call your qualified SBA lender and begin the process of gathering financial and tax records

The loans are available to small businesses, small agricultural cooperatives, small aquaculture businesses, and most private nonprofits. The loans come directly through the SBA, not through banks.

The loans offer working capital loans for payroll, accounts payable, and other bills that could have been paid had the disaster not occurred; could be used to pay fixed debts

Applicants need to show they have suffered working capital losses due to the coronavirus disaster

The SBA will do an internal test to determine eligibility, so applicants do not need to produce any bank documentation for their application

95% of the loans previously issued have been for $500,000 or less but can go up to $2 million. The SBA will determine the loan amount

Loans up to $2 million are to be repaid over 30 years at 3.75% fixed rate; payments deferred over the first 12 months

Must be small business per SBA size standards

Loans > $25,000 require collateral

How to apply: https://disasterloan.sba.gov/ela/Information/EIDLLoans or sba.gov/disaster. We have also covered the SBA loan program in our post Help Businesses And Families Now – COVID-19 Responses

Below are the high points on the Stimulus Loans/Grants only (Who, What, When, Where and How). As facts become clear, this page will be updated. Always trust an authoritative source, not this post that summarizes the facts.

WHO is eligible: Businesses with less than 500 employees. Multi-location restaurants with more than 500 employees, but no single location with more than 500 employees will be eligible

WHAT Loan Amount: 2.5 times your average monthly payroll costs limited to $10 million. 10-year loan with an interest rate of 4.0% or lower. No prepayment penalties. (Further definition of payroll costs will be defined, but 1099 contractors are included in this calculation). Loan Forgiveness is included: the amount of the loan used to pay for payroll, rent, utilities, and mortgage interest from February 15, 2020, through June 30, 2020, will be forgiven. The debt forgiven will not be considered taxable income.

WHEN: Mnuchin said in a press conference that these loans should be available Friday, April 3, 2020

WHERE: Any FDIC insurance bank or federally insured credit union will be able to provide these loans. These loans will be SBA loans, but you do not need to go through an SBA bank or the SBA website to access these loans. We do know which banks will be participating at this time

HOW: We don’t know what documentation will be required precisely but be prepared to have payroll tax returns and payroll reports from 2019 and YTD 2020 available to calculate your eligibility and the amount of the loan. We recommend that you start getting your payroll records together so you can get in front of the line once this program starts

Additionally, there is no personal guarantee required on any of the loans. They are 100% insured by the Federal Government

Individuals

Recovery rebates of up to $1,200 for singles, $1,200 for heads of households, and $2,400 for married couples filing jointly — families with children under 17 will also receive an additional $500 per qualifying child. Payments would be phased out for those earning more than $75,000 a year. Those earning more than $99,000 would not be eligible. These phase-out numbers double for married couples. The only people excluded are those who are behind on child support payments

Expansion of unemployment benefits, including for self-employed and gig-economy workers

Jobless workers receive an extra weekly boost from the federal government of $600/week in addition to state aid. Self-employed workers, independent contractors and those who typically don’t qualify for unemployment benefits would be eligible

Unemployment benefits, which run out after six months in most states, will be extended for an additional 13 weeks

Waiver of the 10% penalty on COVID-19-related early distributions from IRAs, 401(k)s and specific other retirement plans

Expansion of charitable contribution tax deductions

Exclusion for certain employer payments of student loans

State of Tennessee Payment Update

On March 26, 2020 the Tennessee Department of Revenue announced that payments due on April 15, 2020 have been extended to July 15, 2020.

Information on other states have not been released to our office. All updates will be posted here.

(Non) Update for 3/26/2020

We have had numerous calls asking about the proposed stimulus package that is being debated as I type. As much as we would like to be able to answer your questions, we just do not know right now. We are watching the news and wondering what will happen along with you.

As soon as we are given information we will pass it along. It will be posted here and on our Facebook page.

Stay safe everyone!!

Update 3/23/2020

On Friday, March 20, Treasury Secretary Steven Mnuchin tweeted that the 2020 income tax filing deadline would be extended, along with payments. On Saturday morning, the Treasury Department and Internal Revenue Service followed up with an official press release that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

  According to the IRS press release:

"Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.

Revised Cutoff Dates

With the extension of the Federal filing date we have updated our cutoff dates for information to be received.

·        For returns to be filed by April 15 the cutoff is still Friday, March 27.

·        For returns to be filed by July 15 the cutoff is Monday June 15.

We must receive all information to prepare returns no later than these dates to ensure your return will be completed and transmitted by April 15 or July 15.

Changes and details are continuing to evolve and we will update as additional information is given to us.

Update for March 21, 2020

The IRS on Wednesday delayed the first installment of quarterly estimated tax payments that businesses and self-employed individuals send to the agency, which will now be due July 15. A stimulus package being negotiated in the Senate would move that deadline back even further to Oct. 15.

The latest updates..........

Under newly revised tax guidelines for 2019 returns, you will have until July 15, 2020 to file and remit payments in full to the Internal Revenue Service without incurring penalty and interest. We anticipate the States will follow suit; however, we have not been given that information. In addition, there is the potential the Internal Revenue Service will be extending the payment due dates for both the April and June 15, 2020 estimated tax payment dates.

This is an ongoing and evolving situation as the Treasury Department is still working to finalize guidelines. As we are provided information, we will pass it along. We will also be sending information to our clients via email. If you would like to provide or update your email address, please send that to either renee@rabcpa.com or stacie@rabcpa.com.

Here are links to more information on deadlines and filing………CNBC; AICPA; USA Today

COVID-19 & Tornadoes

First a reminder that the cutoff to bring or send tax information is quickly approaching: Friday, March 27.

As we are all being bombarded with information about the tornado disaster and now the COVID-19 virus and what should be done to limit the spread, we wanted to take a minute and assure our clients that we are still working with you.

With the destruction of the tornadoes in Tennessee and the COVID-19 virus there have been many rumors of important deadlines being extended. This information seems to change by the minute and can be quite overwhelming. As we are given final dates, we will pass those along.

It has been announced that residents of Davidson, Wilson and Putnam counties will be granted an extension of July 15 to file income tax returns. Our office intends to file client returns by or before the usual date of April 15. Of course, any clients that are directly affected by this disaster will be able to extend their filing and we will work with them to make the process as easy as possible.

As always, information can be emailed or faxed to our office and meetings can be held over the phone. If you plan to stop by our office, be assured that we are taking every precaution to limit the possibility of spreading germs.

If you have any questions or concerns do not hesitate to call the office.

Stay Well Everyone!!

Cutoff dates for 2019 Tax Year

Tax Time is upon us as the new year gets into full swing. We wanted to pass along some information that can be helpful to our clients.

The cutoff dates to deliver, email or fax tax information to our office is :

Partnerships and Corporations- Monday, March 3, 2020

Individuals-Friday, March 27, 2020

These dates are to ensure that our staff has ample time to process and prepare your return before the April 15 deadline. There are numerous stages that each and every return goes through from the time the information is received until your return is absolutely complete. Returns are completed in the order they are received.

Individuals should complete 2019 Tax Information Worksheet and Charitable Contributions page that can be printed from the “Useful Forms” section of our website (or just click on the green phrases). This is to ensure all information is updated and correct. Bring this along with your tax information. If you have questions, do not hesitate to contact the office.

After we have completed your return, we will contact you by phone, email or text (whichever you prefer).

Our office is open Monday through Friday from 8:00 am to 5:00 pm.

**Information can be emailed to our office for your convenience. Please note in the subject line 2019 Tax Information.

**Please bring all information at the same time. Bringing additional information after you have informed us that your return is ready to be completed can result in additional fees (or an extension) if your return must be redone.**

We must receive ALL information to prepare returns by these dates to ensure that your return will be completed and transmitted by April 15, 2020.

We would like to thank all our clients for entrusting us with their financial and tax needs.