DC Tax Flash: Sporadic Talks on Virus Relief Bill Limp Forward
Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi (D-CA) spoke by phone today to discuss virus relief legislation with no real progress reported. The two plan to speak again tomorrow.
Few, including Secretary Mnuchin, seem to think that a breakthrough is at hand or even possible ahead of the election. "[A]t this point, getting something done before the election and executing on that would be difficult," Secretary Mnuchin said today.
As these sporadic talks continue, Senate Majority Leader Mitch McConnell (R-KY) plans to hold a vote early next week on additional funding for the Paycheck Protection Program (PPP). "When the full Senate returns on October 19th, our first order of business will be voting again on targeted relief for American workers, including new funding for the PPP," Leader McConnell announced. "Unless Democrats block this aid for workers, we will have time to pass it before we proceed as planned to the pending Supreme Court nomination."
Last month, the Senate held a procedural vote on a broader Republican-drafted virus relief bill that failed on a 52-47 tally (60 votes were needed to proceed). Barring any major changes, it appears likely that Sen. McConnell's effort to approve additional PPP funding will suffer a similar fate.
Earlier this month, the House approved a scaled-back version of the HEROES Act after talks on a bipartisan relief package stalled out. Although the bill was immediately rejected by Leader McConnell as unworkable, it serves as a positional statement for House Democrats headed into the November elections.
Today, the Joint Committee on Taxation (JCT) issued a revenue estimate of the tax provisions of the House-passed HEROES Act. The report estimates that the bill's revenue provisions, taken together, would reduce revenue by just over $300 billion. Included in that figure are two provisions in the HEROES Act that would ratchet back the net operating loss (NOL) provisions in the previously enacted CARES Act, raising $254 billion, according to the JCT.
The text of the JCT revenue estimate is posted here.
Also on the topic of NOLs, the Internal Revenue Service (IRS) today added a new FAQ on the timing for ending temporary procedures that allow the faxing of Form 1139 and Form 1045 due to the coronavirus.
The new FAQ explains:
21. When does the temporary faxing process described in these FAQs end?
The last day to fax an eligible refund claim under these procedures is December 31, 2020. The fax numbers listed herein will no longer be operational as of midnight on December 31, 2020. The instructions to the Form 1139 and Form 1045 provide the applicable requirements for how to submit these forms to IRS. The end of the faxing process is independent of any filing due dates. For example, the last day to file Form 1139 electing to take the 100% refundable minimum tax credit in 2018, is December 30, 2020. Additionally, if you file one application for a tentative refund and claim both the NOL carryback and the minimum tax credit at the same time, you must file the application by the earliest applicable deadline.
The full set of FAQs on this topic is posted here.
Miller & Chevalier Coronavirus Task Force
The outbreak of COVID-19 is creating significant business and legal challenges for companies throughout the world. In response to client demand, the firm has formed an interdisciplinary task force to help businesses navigate these issues.
This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.