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There has been no word on plans for congressional negotiations on an interim measure to provide $250 billion more toward the CARES Act Paycheck Protection Program (PPP) that gives small business loans with forgiveness terms. On April 9, Democrats objected to a Senate unanimous consent request to provide the funding, and Republicans objected to a Democratic alternative that would stipulate that some of the funding be carved out for community-based lenders and provide $100 billion more for health care needs, $150 billion for state & local governments, and a 15% increase to the maximum SNAP food benefit.

The standoff inflamed partisan tensions — Republican leaders said the funding was being held "hostage," and Democrats called the move to quickly address only the PPP and no other needs a "stunt" — and talks did not appear imminent going into a holiday weekend. A CNN reporter tweeted Majority Leader Mitch McConnell (R-KY) as saying of bipartisan negotiations, "We'll have to do that again at some point," and as saying on a GOP call that he believes pressure will build on Democrats to accede on PPP funding. The Senate is adjourned until another pro forma session on Monday, April 13.

The April 10 Washington Post said about $100 billion has already been committed in forgivable loans under the PPP, and cited Speaker Pelosi as acknowledging more money will eventually be needed for the PPP but wanting more data from Treasury. "We have time to negotiate to see how and where and when we should have more money there," she said in the report.

An interim action, if it materializes, would be separate from the effort to pass a broader $1 trillion-plus bill, which House Speaker Nancy Pelosi (D-CA) has deemed "CARES 2" and said she wants the House to pass by the end of April. House Democrats have been looking at perhaps releasing their version next week.

Passing a broader bill, and probably even an interim measure, would likely require bringing many members back to Washington, and there are fresh doubts that Congress could reconvene the week of April 20 while much of the nation remains shut down. Both chambers had set that timeframe as the earliest they would return to a regular session. The Hill newspaper cited Senator Roy Blunt (R-MO) as saying he thinks it is unlikely for the Senate to return then, when most cities are under closure orders through April 30, "but we may have to figure out a way to come back." Speaker Pelosi said she wouldn't ask members back when it might not be healthy for them to return. The House may be unlikely to move any legislation on an expedited basis given at least one member's (Rep. Massie) insistence that a quorum be present for all business.

Lawmakers may be under pressure to do more amid unemployment benefit filings topping 17 million over four weeks, the challenges of distributing the various benefits provided for in the CARES Act, and uncertainty over timing for reopening the country and economy. A New York Times story described limitations of federal agencies providing money quickly and noted proposals to expand the PPP and new approaches, such as Senate Finance Committee Ranking Member Ron Wyden's (D-OR) call for government-provided cash assistance of up to $75,000 each for businesses that employ 50 workers or less.

In other implementation news, the Department of Health and Human Services (HHS) will begin delivery of the initial $30 billion in relief funding to providers on April 10 in support of the national response to COVID-19, the first batch of funding allocated from the of the $100 billion provider relief fund created in the CARES Act.

IRS guidance

The IRS released a flurry of guidance the evening of April 9 related to CARES Act provisions and filing deadlines and approaches.

The IRS has issued guidance (Revenue Procedure 2020-24) for taxpayers who may now, under the CARES Act, carry back net operating losses (NOLs) for five years. Revenue Procedure 2020-24 provides procedures for: (1) waiving the carryback period for an NOL arising in a tax year beginning after December 31, 2017, and before January 1, 2021; (2) excluding IRC Section 965 inclusion years from the carryback period for an NOL arising in a tax year beginning after December 31, 2017, and before January 1, 2021; and (3) waiving or reducing a carryback period or revoking an election to waive a carryback period for tax years that began before January 1, 2018 and ended after December 31, 2017.

Further, the IRS has announced (Notice 2020-26) that it will grant a six-month extension to individuals, trusts and estates filing Forms 1045, Application for Tentative Refund, and to corporations filing Form 1139, Corporation Application for Tentative Refund, in relation to NOL carrybacks that arose in a tax year beginning in 2018 and ending by June 30, 2019.

In Notice 2020-23, the IRS and the Treasury Department significantly broadened its tax return filing and payment relief in response to COVID-19. Generally, all taxpayers, including Americans who live and work abroad, with a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, have until July 15, 2020, to file returns and make payments without penalties or interest. The relief applies to individuals, trusts, estates, corporations, and other non-corporate tax filers, including fiscal-year filers.

Finally, in a news release (IR-2020-68), IRS reminded taxpayers and tax professionals to use electronic options to support social distancing and speed the processing of tax returns, refunds and payments.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through April 8.

An EY Webcast, "Tax in the time of COVID-19," is today, April 10, at 12:00 p.m. (Register)

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