Recent estimates by the Internal Revenue Service (IRS) indicate that nearly $1 trillion in legally owed taxes go uncollected each year, making addressing this gap a major focus for both the IRS and Biden administration. In fact, it has been proposed by the current administration to increase the IRS’s budget by $80 billion over the next 10 years.
More than seven weeks after the American Rescue Plan Act (ARPA) was signed into law authorizing the $28.6 billion Restaurant Revitalization Fund (RRF), access to this much-anticipated grant program is now within sight. The U.S. Small Business Administration’s (SBA) RRF Application Portal is set to open for account registration on Friday, April 30, 2021 at 9:00 AM EDT.
The IRS continues to increase their scrutiny of cryptocurrency and virtual currency activity in an effort to eliminate widespread noncompliance. The prioritization of virtual currency above other current tax issues reflects the scale of noncompliance and potential revenue collection opportunities. This is most evident in the annual revisions to 2020 Form 1040, where The Virtual Currency Question has been moved to the first page and is prominently featured—front & center.
On Tuesday, March 30, 2021, the Paycheck Protection Program (PPP) application deadline was officially extended from March 31, 2021 until May 31, 2021 via President Biden’s signing of the PPP Extension Act of 2021 (H.R. 1799).
The global pandemic has catalyzed the use of remote workforces. As previously discussed in this article, there are challenges and intricacies for employer nexus and employee withholding, and many states have continued to expand and extend relief granted to companies with employees working remotely due to the COVID-19 pandemic.
The OECD’s new emphasis on aligning profits with value creation through the conclusion of the BEPS Action Plan has resulted in an ever-growing number of companies facing the challenge of preparing documentation that includes detailed value chain analyses and justifies transfer pricing (TP) policies.
Health Savings Accounts (HSA) have become increasingly more popular choices for both employers and individuals as they look to offset the rising costs of healthcare and insurance premiums. In fact, according to the 2020 Midyear Devenir HSA Research Report, the HSA market will approach 35 million accounts by the end of 2022, holding over $100 billion in assets.
Since the introduction of the Global, Intangible, Low-Taxed Inclusion (“GILTI”) in the 2017 Tax Cuts and Jobs Act (“TCJA”), taxpayers have eagerly awaited the Treasury’s position on whether the High Tax Exception Election (“HTE Election”) under IRC §954(b)(4) would apply.
On March 17, 2021, the Treasury Department and the IRS announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021 to May 17, 2021. Individual taxpayers, including those who pay self-employment tax, can also postpone 2020 federal income tax payments due on April 15, 2021 to May 17, 2021, without penalties and interest, regardless of the amount owed.
In January 2021, the market value of the world’s cryptocurrencies passed $1 trillion – a record-breaking milestone for digital currencies that only six months prior had a total market value of around $260 billion. Although the masses have yet to adopt digital currencies as a widely used, primary medium of exchange, cryptocurrency is now the world’s fifth most circulated currency by value, suggesting it’s becoming more mainstream.
On March 3, 2021, the Small Business Administration (SBA) released new FAQs related to the Paycheck Protection Program (PPP) which incorporate the changes made to the program by the Consolidated Appropriations Act. Notably, the SBA updated FAQ 46 to assure businesses that all Second Draw PPP loan borrowers, because they must demonstrate a 25% reduction in gross revenues, will be deemed to have made the required good faith certification concerning the necessity of their loans.
On March 1, 2021, the IRS released Notice 2021-20 to provide comprehensive guidance on the Employee Retention Credit (ERC) and formalize the IRS’s FAQs, thereby allowing taxpayers to rely on the guidance for penalty prevention purposes. The notice explains the tax treatment of the ERC and, significantly, provides long-awaited instructions on how Paycheck Protection Program (PPP) loan borrowers may qualify for and claim the ERC for wages paid after March 12, 2020 and before January 1, 2021. Therefore, borrowers who can potentially claim the credit are now better positioned to proceed with applying for PPP loan forgiveness.