Our colleague Jana Volante Walshak has published an article addressing the steps that businesses can take now to protect themselves against qui tam actions related to the CARES Act Paycheck Protection Program. Many organizations may have thought the “hard part” was over when they received loans under the Paycheck Protection Program. In reality, the hard part is only beginning for loan recipients as they attempt to comply with the program’s constantly changing regulatory scheme. The uncertain nature of the rules and regulations governing the Paycheck Protection Program makes it possible for the leaders of an organization to mistakenly believe it is in full compliance when it is not. Failure to comply with the rules and regulations governing the program could render the certifications made to obtain the funds false, potentially resulting in severe consequences – liability under the False Claims Act. However, there are certain steps organizations can take now to protect themselves.

You can read Jana’s article here.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.

 

 

Our colleagues Oksana Wright and Charles DeMonaco have published an article in Corporate Compliance Insights discussing management and corporate compliance measures for companies to prioritize during the uncertainty posed by COVID-19 pandemic.  You can read their article here.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.

The Internal Revenue Service’s Large Business & International Division has announced another compliance campaign, its 64th such campaign since the first set of campaigns was unveiled in 2017. This latest campaign will focus on the Tax Cuts and Job Act legislation enacted in late 2017.

These compliance campaigns reflect LB&I’s movement toward issue-based examinations and a compliance process in which LB&I decides which tax issues that present risk require a response in the form of one or multiple treatment streams to achieve compliance objectives. This approach is intended to make the best use of the IRS’s knowledge and to deploy the right resources to address these issues. The campaigns are the culmination of an extensive effort to redefine large business compliance work and build a supportive infrastructure inside LB&I. The overall goal is to improve return selection, identify issues representing a risk of non-compliance, and make the greatest use of limited resources. A complete list of all active campaigns is available here. A list of retired campaigns is available here.

The Tax Cuts and Jobs Act (TCJA) campaign was created to closely monitor issues relating to the TCJA. LB&I will be examining a select pool of returns that reflect tax law changes brought about by the TCJA, and will share that information throughtout the IRS. As part of this campaign, LB&I will also consider the impact of the CARES Act on these returns as well as any others examined. The goal of this campaign is to identify transactions, restructuring, and technical issues and better understand taxpayer behavior under the new law. The treatment streams for this campaign may include examinations, soft letters, outreach, new and improved practice units, and development of future issue-based campaigns.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

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The Internal Revenue Service has published two Frequently Asked Questions about how taxpayers can seek release of tax levies and federal tax liens due to hardship circumstances caused by the COVID-19 pandemic.  The FAQs can be found at the bottom of the IRS web page entitled “IRS Operations During COVID-19: Mission-critical functions continue,” which is available here.

According to the FAQs, tax levies will not be automatically released because of the COVID-19 pandemic, but the IRS will consider taxpayer requests to release levies on a case-by-case basis if the levy is causing an economic hardship.  “Economic hardship” means that the levy is preventing the taxpayer from meeting basic, reasonable living expenses.  The IRS may ask for additional financial information to determine if a levy is causing an economic hardship.

The FAQ provides detail on how to request a levy release.  If the taxpayer is working with a revenue officer, they should contact the revenue officer.  For cases not assigned to a revenue officer, taxpayers should first call the telephone number on the notice of levy.  If the taxpayer is unable to get through on the number (which is unlikely given that all IRS customer service phone lines are closed), the taxpayer should fax a levy release request to (855) 796-4524.  The levy request must include the taxpayer’s name, address, and social security number (including spouse if they filed jointly), as well as the name, address, and fax number of the taxpayer’s employer or bank where the levy is being processed.  The IRS cautions that this fax number will only be used to address emergency levy release requests.

The IRS has published a second FAQ addressing how taxpayers can address issues relating to federal tax liens, including how to obtain a lien release or certificate of discharge. The IRS says that it is processing all electronically-submitted lien certificate applications normally and assigning them within 10 days. To protect the health and safety of IRS employees and taxpayers, the IRS is not currently processing lien certificate applications sent by regular mail to the Advisory Consolidated Receipts location in Florence, Kentucky. Instead, the IRS requests that taxpayers fax requests to (844) 201-8382 for certificates such as discharge of property from a federal tax lien; withdrawal of the notice of federal tax lien; and subordination of the federal tax lien.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.

Fox Rothschild attorneys Marissa Koblitz Kingman and Joseph A. DeMaria have published a client alert addressing the risks that state price gouging laws pose to retailers during states of emergency.  You can read their alert here.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.

On Tuesday, April 21, 2020, at 9:30 a.m. ET, Fox Rothschild partner Matthew D. Lee will present a webinar entitled “Federal Tax Enforcement in the Age of COVID-19.” The COVID-19 pandemic and the President’s declaration of a national emergency has upended the Internal Revenue Service’s enforcement agenda in a dramatic way, both in the short term and for the feasible future. This webinar will address the following topics:

  • Current status of IRS operations
  • Extensions of tax filing and payment deadlines
  • IRS “People First Initiative” and its implications for tax enforcement in the short-term
  • Status of pending audits, appeals and U.S. Tax Court proceedings
  • Modifications to enforced collection activities and opportunities for taxpayers who owe back taxes
  • Status of criminal tax investigations in the COVID-19 environment
  • Anticipated priorities of Criminal Investigation Division post-COVID-19

To register for the webinar, please click here.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.

In response to the unprecedented public health crisis unfolding across the country, Fox Rothschild’s White-Collar Criminal Defense & Regulatory Compliance Group has assembled a COVID-19 Compassionate Release Task Force to assist with compassionate release cases of non-violent offenders in jails and prisons throughout the United States.

Close quarters, lack of access to appropriate health care and other considerations make this population particularly vulnerable to the spread of the virus. The team has already successfully navigated the early release of incarcerated individuals in New Jersey.

Marissa Kingman is spearheading our effort to track developments in the law nationwide, and we are working with the National Association of Criminal Defense Lawyers and local affiliates throughout the country to ensure that we have a pulse on developments at the state and federal level.

If you require assistance with a compassionate release matter, please contact Matt AdamsMatt Lee or Marissa Kingman.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.

The declaration of a national emergency can trigger insider trading inquiries focused on the owners of a stock portfolio, 401(k) plan or brokerage account if they sold before or after the emergency was declared.

Fox Rothschild’s Securities Industry Practice presents an informative session on how to respond when confronted with questions from investigators and an outline of the process such investigations follow, led by attorneys Patrick Egan, Chuck DeMonaco, and Trisha Stein.

This complimentary webinar will be held on Thursday, April 16, 2020, at 2:00 pm ET.  To register, click here.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.

Providing additional relief to taxpayers affected by the COVID-19 pandemic, the Internal Revenue Service has extended a wide array of key tax deadlines for individuals and businesses to July 15, 2020. Last month, the IRS announced that taxpayers generally have until July 15, 2020, to file and pay federal income taxes originally due on April 15. No late-filing penalty, late-payment penalty or interest will be due.

In Notice 2020-23, issued on April 9, the IRS granted relief to many additional returns, tax payments, and other tax-related actions. As a result, the extension to July 15 now applies generally to all taxpayers who have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time. This means that anyone, including U.S. citizens who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.

Notice 2020-23 also extends relief to estimated tax payments due June 15, 2020. This means that any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.

For 2016 tax returns, the normal April 15 deadline to claim a refund has also been extended to July 15, 2020. The law provides a three-year window of opportunity to claim a refund.  If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail, and ensure the tax return is postmarked by the July 15, 2020, date.

Tax Returns and Payments To Which Notice 2020-23 Applies

The extension relief afforded by Notice 2020-23 applies to all taxpayers affected by the COVID-19 pandemic who have a tax filing obligation and/or a tax payment obligation.  This includes the following:

  • Individual income tax payments and return filings on Form 1040, U.S. Individual Income Tax Return, 1040-SR, U.S. Tax Return for Seniors, 1040-NR, U.S. Nonresident Alien Income Tax Return, 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, 1040-PR, Self-Employment Tax Return – Puerto Rico, and 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico);
  • Calendar year or fiscal year corporate income tax payments and return filings on Form 1120, U.S. Corporation Income Tax Return, 1120-C, U.S. Income Tax Return for Cooperative Associations, 1120-F, U.S. Income Tax Return of a Foreign Corporation, 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation, 1120-H, U.S. Income Tax Return for Homeowners Associations, 1120-L, U.S. Life Insurance Company Income Tax Return, 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons, 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return, 1120-POL, U.S. Income Tax Return for Certain Political Organizations, 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts, 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies, 1120-S, U.S. Income Tax Return for an S Corporation, and 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B);
  • Calendar year or fiscal year partnership return filings on Form 1065, U.S. Return of Partnership Income, and Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return;
  • Estate and trust income tax payments and return filings on Form 1041, U.S. Income Tax Return for Estates and Trusts, 1041-N, U.S. Income Tax Return for Electing Alaska Native Settlement Trusts, and 1041-QFT, U.S. Income Tax Return for Qualified Funeral Trusts;
  • Estate and generation-skipping transfer tax payments and return filings on Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, 706-A, United States Additional Estate Tax Return, 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts, 706-GS(T), Generation-Skipping Transfer Tax Return for Terminations, 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions, and 706-GS(D-1), Notification of Distribution from a Generation-Skipping Trust (including the due date for providing such form to a beneficiary);
  • Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, filed pursuant to Revenue Procedure 2017-34;
  • Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent and any supplemental Form 8971, including all requirements contained in section 6035(a) of the Code;
  • Gift and generation-skipping transfer tax payments and return filings on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return that are due on the date an estate is required to file Form 706 or Form 706-NA;
  • Estate tax payments of principal or interest due as a result of an election made under sections 6166, 6161, or 6163 and annual recertification requirements under section 6166 of the Code;
  • Exempt organization business income tax and other payments and return filings on Form 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e) of the Code);
  • Excise tax payments on investment income and return filings on Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation, and excise tax payments and return filings on Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code; and
  • Quarterly estimated income tax payments calculated on or submitted with Form 990-W, Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations, 1040-ES, Estimated Tax for Individuals, 1040-ES (NR), U.S. Estimated Tax for Nonresident Alien Individuals, 1040-ES (PR), Estimated Federal Tax on Self Employment Income and on Household Employees (Residents of Puerto Rico), 1041-ES, Estimated Income Tax for Estates and Trusts, and 1120-W, Estimated Tax for Corporations.

Postponement of Due Dates to July 15

For all of taxpayers with filing and payment obligations listed above, the due date for filing and making payments is automatically postponed to July 15, 2020. This extension is automatic. Taxpayers do not have to call the IRS or file any extension forms, or send letters or other documents to receive this relief.

However, taxpayers who wish to obtain a further extension, until October 15, 2020, must file the appropriate extension form by July 15, 2020. For example, a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, may be filed by July 15, 2020, to extend the time to file an individual income tax return, but that extension will only be to October 15, 2020. That extension will not extend, however, the time to pay federal income tax beyond July 15, 2020.

The relief afford by Notice 2020-23 includes not just the filing of the tax forms identified above, but also all schedules, returns, and other forms that are filed as attachments or are required to be filed by the tax return due date including, for example, Schedule H and Schedule SE, as well as Forms 3520, 5471, 5472, 8621, 8858, 8865, and 8938. This relief also includes any installment payments under IRC section 965(h) due on or after April 1, 2020, and before July 15, 2020. Finally, elections that are made or required to be made on a timely filed tax form (or attachment) will be deemed timely made if filed on such tax form or attachment, as appropriate, on or before July 15, 2020.

As a result of the postponement of the due date for filing tax forms and making payments, the period beginning on April 1, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to file the forms or make payments. Interest, penalties, and additions to tax with respect to such postponed filing and payment obligations will begin to accrue on July 16, 2020.

Relief With Respect to Specified Time-Sensitive Tax-Related Actions

Taxpayers will also have until July 15, 2020, to perform all certain tax-related that are due to be performed on or after April 1, 2020, and before July 15, 2020. This relief includes the time for filing all petitions with the Tax Court, or for review of a decision rendered by the Tax Court, filing a claim for credit or refund of any tax, and bringing suit upon a claim for credit or refund of any tax. This notice does not provide relief for the time period for filing a petition with the Tax Court, or for filing a claim or bringing a suit for credit or refund, if that period expired before April 1, 2020.

Postponement of Due Dates with Respect to Certain Government Acts

Notice 2020-23 also provides the IRS with additional time to perform the certain time-sensitive tax-related actions. Due to the COVID-19 emergency, IRS employees, taxpayers, and other persons may be unable to access documents, systems, or other resources necessary to perform certain time-sensitive actions due to office closures or state and local government executive orders restricting activities. The lack of access to those documents, systems, or resources will materially interfere with the IRS’s ability to timely administer the Internal Revenue Code. As a result, IRS employees will require additional time to perform time-sensitive actions.

The additional time granted to the IRS by Notice 2020-23 applies to the following categories of persons:

  • persons who are currently under examination;
  • persons whose cases are with the Independent Office of Appeals; and
  • persons who, during the period beginning on or after April 6, 2020 and ending before July 15, 2020, file amended returns or submit payments with respect to a tax for which the time for assessment would otherwise expire during this period.

With respect to these categories of persons, a 30-day postponement is granted for time-sensitive actions required to be taken by the IRS if the last date for performance of the action is on or after April 6, 2020, and before July 15, 2020.

Please check out Fox Rothschild’s coronavirus resource page, which is available here.

For more up-to-date coverage from Tax Controversy and Financial Crimes Report, please subscribe by clicking here.