The House is planning to vote today (May 28) on a bill (H.R. 7010) on the suspension calendar that would extend the CARES Act Paycheck Protection Program (PPP) loan forgiveness covered period from eight weeks to 24 weeks and require that 60% of funds be used for payroll expenses, rather than 75% currently. A previous version would have scrapped the payroll requirement altogether but was modified after labor unions warned that doing so could reduce incentives to rehire workers.

The other main House agenda item this week was a Foreign Intelligence Surveillance Act (FISA) bill, but it has been pulled due to Republican opposition. The Senate is out this week but will have a pro-forma session today.

Regarding a next bill, the White House is pushing for possible inclusion of a plan to end surprise medical billing and protect the insured from the costs of emergency or out-of-network care "that would outlaw health care providers from putting patients on the hook for thousands of dollars in expenses — but without mandating how doctors and hospitals would recover their costs from insurers," Politico reported.

In a new Medium post, presumptive Democratic presidential nominee Joe Biden proposed a Pandemic Testing Board with members from the public and private sectors to oversee a nationwide campaign to provide both diagnostic and antibody tests, with positive tests to be followed by isolation and contact tracing. The post said the 15 million tests conducted thus far, which President Trump celebrated in a tweet yesterday, is insufficient and the federal government's response has failed in terms of testing.

A White House report over the weekend continued to put the testing onus on states rather than establishing a federal framework, which Democrats have criticized. House Speaker Nancy Pelosi (D-NY) kept pressure on Republicans on testing in a news conference with other Democrats, saying "it is essential for the economic recovery of our country, it is essential for the health and well-being of the American people, it is essential to sending our children back to school." The House-passed HEROES Act provides additional funding for testing, and while Senate Majority Leader Mitch McConnell (R-KY) wants a pause before more congressional action, Speaker Pelosi said, "I don't think the virus is taking a pause. I don't think Congress is taking a pause. I don't think job and security is taking a pause. I don't think paying rent takes a pause. We don't need a pause, we need action and today we are focusing our action on testing, testing, testing."

New York Governor Andrew Cuomo (D) visited the White House yesterday and pitched President Trump on infrastructure investment, which the Administration and congressional Democrats have previously expressed interest in, as well as pushing for additional state and local funding. Partisan differences seemed to be defused by the NYC commonality between the two. On MSNBC later Gov. Cuomo said "You want to get this economy up and running. You want to do it fast. Do an infrastructure bill. It's long overdue. … I think the president got that. You know, he's a builder by career. He's a developer. He gets that it's about the economy. That's his number one goal. And he gets that people need to see a light at the end of the tunnel and taking on some big projects that have a better future makes sense. I don't know what he's going to be able to get done with the Republicans in Congress."

There have been many tributes, including from the Washington community, for former Rep. Sam Johnson (R-TX), a POW and longtime Ways & Means member who has passed away. "From the skies over North Korea to the infamous 'Hanoi Hilton' to the Halls of Congress, America has known few patriots as great as Sam Johnson," Ways & Means Ranking Member Kevin Brady (R-TX) said.

Implementation

The IRS has posted further information for subchapter C corporation taxpayers (C corporations) that are carrying back NOLs to years in which the alternative minimum tax (AMT) applies.

Yesterday, Treasury and IRS provided relief for taxpayers developing renewable energy projects and producing electricity from sources such as wind, biomass, geothermal, landfill gas, trash and hydropower, modifying guidance regarding the beginning of construction for IRC Sections 45 and 48. Specifically, the notice extends the Continuity Safe Harbor for both the production tax credit for renewable energy facilities under IRC Section 45 and the investment tax credit for energy property under IRC Section 48 for projects that began construction in either calendar years 2016 or 2017. The notice also provides a 3½ Month Safe Harbor for services or property paid for by the taxpayer on or after September 16, 2019, and received by October 15, 2020.

Also yesterday, the Federal Reserve Bank of Boston released a number of loan document forms for lenders and borrowers participating the Fed's forthcoming Main Street Lending Program, which will support lending to small and medium-sized businesses that were in "sound financial condition" before the onset of the coronavirus pandemic. The MSLP is expected to be operational and lending within the next week to 10 days.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through May 26.

An EY Webcast, "Tax in the time of COVID-19: What's new and notable in tax credits, refunds and at the IRS," is this Friday, May 29 at 12:00 p.m. ET. Events like the spread of the coronavirus (COVID-19) have made reacting to trade disputes and continued implementation of the Tax Cuts and Jobs Act much more difficult. After a review of the legislative and economic landscape, this week's panelists will explore: (i) bonus depreciation (qualified improvement property), Alternative Minimum Tax Credit refunds and Section 165(i); (ii) the Employee Retention Credit; (iii) IRS operations and guidance; and (iv) any breaking developments. Register.

———————————————