AICPA Tax Insider (Aug. 13, 2020): AICPA Asks for PPP Deducibility; Professional Responsibility in Virtual Age; and More!

R&D tax credits: A valuable cash infusion for businesses

By Karen J. Koch, CPA

In these uncertain economic times when almost every business is struggling, it’s time to take another look at these beneficial credits, which many businesses may not realize they can take.

AICPA continues to ask Congress to include PPP deductibility in upcoming legislation

The AICPA joined over 170 organizations to urge Congress to “include a technical correction addressing the tax treatment of loan forgiveness under the Paycheck Protection Program (PPP)” in its next round of legislation addressing the coronavirus pandemic.

Executive order delays workers’ payroll tax payments

President Donald Trump issued an executive order to defer the withholding, deposit, and payment of certain payroll taxes paid from Sept. 1 through Dec. 31, 2020.

TIGTA critiques IRS’s protection of taxpayer data

The IRS continues to have challenges protecting taxpayer data, and especially ensuring that its various applications provide complete and accurate audit trails, according to the Treasury Inspector General for Tax Administration (TIGTA).

Litigation support payments are income, not loans

Litigation support payments a lawyer received were gross income and not nontaxable loan proceeds because he had only a conditional obligation to repay them.

Professional responsibilities in the virtual age

By Kathryn Clymer-Knapp, J.D., LL.M.; Christopher M. Whitcomb, J.D., LL.M.; and Felicia J. Nickerson, J.D., LL.M.

With more practitioners working remotely, it’s a good time to review those responsibilities when attracting new clients, providing services virtually, and protecting client information.

Tax document summaries for the week of August 10–14, 2020, covering corporations, individuals, and more.

CORPORATIONS

Corrections to T.D. 9900

The IRS announced three corrections to T.D. 9900, which provided guidance on net operating losses of consolidated groups. Announcement 2020-11 (8/10/20).

INDIVIDUALS

Executive order defers payroll taxes

A presidential memorandum deferred the withholding, deposit, and payment of certain payroll taxes paid from Sept. 1 through Dec. 31, 2020. The deferral applies to the employee portion of the old-age, survivors, and disability insurance tax under Sec. 3101(a) and Railroad Retirement Act Tier 1 tax under Sec. 3201 for any employee whose pretax wages or compensation during any biweekly pay period generally is less than $4,000. Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster (8/8/20) (see related news story).

Final regs. issued on payments to charitable organizations

The IRS issued final regulations on the treatment of payments made to charitable organizations in return for consideration, including in return for state and local tax credits. T.D. 9907 (8/10/20) (see related news story).

Failure to sign tax return leads to dismissal of refund action

The Court of Federal Claims granted the government’s motion to dismiss the taxpayers’ complaint seeking a tax refund because the taxpayers did not sign their tax returns in the year at issue, meaning the court did not have subject matter jurisdiction to decide their claim. Gregory, No. 19-386T (Fed. Cl. 8/10/20).
 

INTERNATIONAL

Announcement on treatment of NAFTA references in U.S.–Switzerland tax treaty

The United States and Switzerland announced that references to the North American Free Trade Agreement in the U.S.–Switzerland income tax treaty will be understood to be references to the United States–Mexico–Canada Agreement, once that agreement goes into effect. Announcement 2020-10 (8/10/20).

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal..

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