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April 9, 2020
2020-0925

IRS recommends waiting for further guidance on CARES Act refunds, closes last service center

The IRS released a statement on April 8, 2020, telling corporate and individual taxpayers that they should wait for further guidance before filing refund claims for benefits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, adding that it expects to issue filing instructions "in the coming days."

The CARES Act includes several relief provisions that can only be fully accessed by filing amended returns to obtain tax refunds, including changes to net operating loss deductions, expanded business interest expense deductions (under IRC Section 163(j)), alternative minimum tax acceleration, and allowing bonus depreciation for qualified improvement property (see Tax Alert 2020-0871).

Ogden facility temporarily closed

The IRS's statement comes as it closed its last open service center in Ogden, UT.1 Some critical personnel are still working at the site, while others are working remotely. The Ogden facility deals with large-business taxpayers, and its duties include the processing of corporate refunds, according to Politico.

Implications

Since the enactment of the CARES Act, taxpayers have raised questions about the most effective way to access the tax benefits provided by Congress given that traditional IRS procedures require most refund claims to be filed in hard copy. With IRS service centers closed, documents sent to the IRS via private delivery service are increasingly being returned as undeliverable. Taxpayers are understandably eager for further guidance from the IRS as to how to file amended returns in the current environment, particularly with Revenue Procedure 2020-23, issued this week, allowing for the filing of amended partnership returns for the 2018 and 2019 tax years (see Tax Alert 2020-0914). Per the IRS guidance, taxpayers should not paper-file amended returns or Forms 1139 until further guidance is issued from the IRS on alternative methods of filing during the COVID-19 crisis.

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Contact Information
For additional information concerning this Alert, please contact:
 
Tax Policy and Controversy
   • Heather Maloy (heather.maloy@ey.com)
   • Kirsten Wielobob (kirsten.wielobob@ey.com)
   • John DiIorio (john.diiorio@ey.com)
   • Melissa Wiley (melissa.wiley@ey.com)

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ENDNOTES

1 Aaron Lorenzo, IRS temporarily shutters its last open service center, Politico (Apr. 8, 2020).

 

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