The Senate is adjourned until June 8, when the next order of business will be a bill addressing maintenance projects on federal lands and land and water conservation, with any action on a next coronavirus bill seen as weeks away after the chamber this week cleared a bill making changes to the Paycheck Protection Program. President Trump yesterday signed an executive order directing the Transportation Secretary to "expedite work on, and completion of, all authorized and appropriated highway and other infrastructure projects" within the department's authority.

Bloomberg reported that President Trump and his advisers are not expected to meet this week to discuss priorities for a next coronavirus response bill — previous reports said such a meeting was possible — but the Administration envisions providing about $1 trillion in relief, aligning with signals from Senate Majority Leader Mitch McConnell (R-KY) about the size of a next package. (The House-passed HEROES Act, an admittedly aspirational opening bid by Democrats for a next bipartisan bill, provided $3 trillion in relief.) According to the report, "McConnell has said that there are no plans to do a stimulus bill before the July 3 two-week recess, leaving action on any such measure [for] after July 20."

Today's Washington Post reported that the 1.9 million unemployment insurance filings reported yesterday, the lowest since the pandemic started, is a signal "the economy's steep slide is leveling off" and a recovery may be beginning, with other signs in increased mortgage applications, oil & petroleum consumption, and travelers in airports.

This morning's jobs report was more positive than anticipated. Total nonfarm payroll employment rose by 2.5 million in May, and the unemployment rate declined to 13.3%, the US Bureau of Labor Statistics reported, saying "these improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic."

The Wall Street Journal's report on workers tapping retirement funds for emergency cash during the pandemic observed that loosening retirement-account rules during times of crisis — early withdrawal penalties have been waived on coronavirus-related distributions from retirement accounts up to $100,000 and there is new flexibility on loans — "underscores a growing acceptance of the idea that retirement accounts, which hold trillions in wealth, do double duty as emergency funds." The story chronicles the evolution of retirement plans and increased access to funds, as well as concerns about retirement security.

Another story in the paper suggested the Administration is pivoting away from the pandemic as its "task force is meeting less frequently, the government's top infectious disease expert is getting little face time with President Trump, and the administration's virus-testing coordinator is returning to his previous job."

The CDC's Robert Redfield testified before a House Appropriations subcommittee yesterday and expressed concern about social gatherings documented in the media (such as Memorial Day weekend pool parties) and discussed the need to embrace social distancing and face coverings, as well as challenges in getting the CDC's messaging on that issue through to some people. Democrats continued to say the US needs a national strategy on testing and tracing. One Republican, Rep. Jaime Herrera Beutler (R-WA), confronted Redfield over CDC's early coronavirus testing failures, including contaminated tests, and suggested the CDC's shortcomings cost the nation precious weeks in fighting the virus.

On the Senate floor yesterday, second-ranking Senate Republican John Thune (R-SD) pitched his Mobile Workforce State Income Tax Simplification Act (S. 604), saying it has particular relevance in the age of coronavirus because "substantial numbers of workers travel to different states for temporary work assignments on a regular basis and they end up subject to a bewildering variety of state laws governing state income tax." He also discussed, through the lens of the coronavirus, his NEW GIG Act (S. 700) that addresses the classification of workers (independent contractors versus employees) and Digital Goods and Services Tax Fairness Act (S. 765) to prevent consumers from being faced with multiple taxes for downloading digital products.

Implementation

Yesterday, in Notice 2020-39, the IRS granted relief to Qualified Opportunity Zone investors and funds by postponing deadlines to satisfy certain requirements and clarifying relief available under the Opportunity Zone regulations (TD 9889). Under the Notice, investors have until December 31, 2020, to invest eligible gains into Qualified Opportunity Funds (QOFs) if the 180-day window for investment would have ended on or after April 1, 2020 and before December 31, 2020 (this deadline had been extended to July 31, 2020, in Notice 2020-23).

Also released yesterday, Revenue Procedure 2020-34 grants temporary relief to arrangements that are treated as trusts that are, or have tenants who are, experiencing financial hardship as a result of COVID-19, to allow them to make certain modifications to their mortgages loans and their lease agreements, and to accept additional cash contributions without jeopardizing their tax status as grantor trusts.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker updated through June 3.

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