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.

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Our colleague Marissa Koblitz Kingman has authored a client alert addressing efforts by New Jersey Attorney General Gurbir Grewal to vigorously enforce the state’s price gouging law during the COVID-19 pandemic. Price gouging violations are punishable by up to a $10,000 fine for the first violation and $20,000 for the second and subsequent violations. Businesses that violate the law may also be required to pay consumer restitution, attorney’s fees and investigative fees. Importantly, each sale of merchandise is considered a separate violation. You can read the alert here.

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

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The Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most individuals. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.

The IRS also released a series of Frequently Asked Questions about the payments, which are set out below:

Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.

Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.

How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.

For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.

The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.

I am not typically required to file a tax return. Can I still receive my payment?
Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.

How can I file the tax return needed to receive my economic impact payment?
IRS.gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information.

I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.

I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.

Where can I get more information?
The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.

The IRS has a reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.

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

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Our colleagues Susan Foreman Jordan and Adam Grenker have published a client alert addressing various provisions in the recently-passed CARES Act which may afford financial relief to individuals with respect to their IRAs and retirement plan accumulations. 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.

The Federal News Network is reporting that the due to the coronavirus pandemic, the IRS issued an evacuation notice Friday afternoon directing that nearly all of its employees work from home on mandatory telework starting Monday, March 30.  Only employees performing “mission-critical duties” will be permitted to come into the office.  Access to IRS offices will be restricted, with employees allowed only to pick up work files and mail.  Affected employees were instructed to take home whatever they needed to work remotely for the foreseeable future.  The evacuation communication to employees is now available on the IRS website here.

The IRS did not make any announcement about whether call centers would continue to be staffed, or whether mail sent to service centers would be opened and processed.  With this evacuation order going into effect tomorrow, it is safe to assume that it will be even more difficult to reach the IRS by telephone – including through the Practitioner Priority Service – and that significant delays in mail processing are likely.

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

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As a follow-up to its announcement that the April 15 income tax filing deadline is extended to July 15, the Internal Revenue Service has created a series of Frequently Asked Questions to address common questions that may arise from taxpayers and tax professionals.  The categories addressed by these FAQs are the following:

  • Eligibility for Relief
  • Filing and paying your 2019 Federal income taxes and your first quarter 2020 Federal estimated income taxes
  • Individual Retirement Accounts (IRAs) and workplace-based retirement plans
  • Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs)
  • Other questions

The IRS page states that the FAQs will be updated periodically and are “designed to be a flexible tool to communicate information to taxpayers and tax professionals in this changing environment.” Note that the FAQs are intended to provide responses to general inquiries and are not citable as legal authority. The Treasury Department and IRS are continuing to consider whether to issue additional IRB guidance on these issues addressed in these FAQs.

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

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As a follow-up to its prior announcement that the April 15 income tax filing deadline is extended to July 15 due to the COVID-19 pandemic, the Treasury Department has announced a similar extension of the filing deadline for any individual who has to file a federal gift tax or generation-skipping transfer tax return by April 15, 2020.  For any such individual, the new due date for filing Forms 709 (United States Gift and Generation-Skipping Transfer Tax Return) and making payments of federal gift and generation-skipping tax is automatically postponed until July 20.

This extension is automatic, and there is no requirement to file Form 8892 to obtain the benefit of the filing and payment postponement.  A taxpayer may still choose to Form 8892 by July 15 in to obtain an extension until October 15, 2020.  Interest, penalties, and additions to tax with respect to such postponed Forms 709 and payments will begin to accrue on July 16, 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.