The Washington Post this morning reported on Senate Finance Committee members "studying a proposal that would allow corporations to claim a bevy of federal tax credits in 2020 that they would otherwise be ineligible to receive until future years." The proposal would void the limitation on claiming federal tax credits that exceed a corporation's overall tax liability, which currently requires them to roll them into future years, the report said.

A next coronavirus response bill that could include tax proposals won't get off the ground until the second half of July as White House and Republican negotiators don't plan to begin talks until Congress returns on July 21 from the Independence Day recess, CNBC said yesterday in a report consistent with other signals on the next bill's timing. "White House and Republican leaders have yet to craft a united position on what programs should be included in a future stimulus bill," the report said, adding that liability protection for businesses is an area of common interest and Senate Majority Leader Mitch McConnell's (R-KY) desire to keep the bill below $1 trillion has gotten a mixed reception from White House officials.

The drill-down on what tax proposals should be tapped for a next response bill will continue with a House Ways and Means Select Revenue Measures Subcommittee hearing on "Tax Relief to Support Workers and Families during the COVID-19 Recession" on Thursday, June 18 at noon. Politico cited a Committee spokesperson as saying the discussion may include refundable tax credits and other "safety net"-type tools.

The top editorial in today's Wall Street Journal said reopening efforts shouldn't be slowed or reversed over fears of another wave of coronavirus infections in light of yesterday's more than 1,800-point stock sell-off and Democrats citing "a spike in cases in Florida, Arizona and Texas as evidence of a virus resurgence."

A story in today's Washington Post said "the federal government has offered little guidance on the best way to test a broad swath of the population, leaving state public health officials to wrestle on their own with difficult questions about how to measure the spread of the virus and make decisions about reopening."

On Bloomberg TV yesterday, House Speaker Nancy Pelosi (D-CA) invited Republican participation in crafting a next bill and highlighted the House-passed HEROES Act's approach to coronavirus testing. "The Administration should take our strategic plan to do that to open up the economy, to bring people back to work, send kids back to school and get the job done for the American people," she said.

In a news conference, the Speaker said the House bill "also puts money into the pockets of people who need it most: Unemployment Insurance, direct payments to families in our country, issues that relate to feeding the hungry. Why would the Republicans object to that?"

The Senate is adjourned until Monday June 15 at 3 p.m. Late last night, the Senate cleared a procedural vote on the Great American Outdoors Act (H.R. 1957), which addresses issues like land and water conservation and national park and forest maintenance. The Senate will likely spend the first half of next week completing consideration of the bill, then proceed to consideration of a judicial nomination.

Election

A New York Times story yesterday said presumptive Democratic presidential nominee Joe Biden "relies on veteran advisers with Washington roots and has begun sounding out other economists on the ideological left, but his campaign will not say who really has his ear."

Regulation

The IRS third quarter update to the 2019–2020 Priority Guidance Plan was released yesterday. Listed under "additional projects" under the international heading are "Regulations related to the foreign tax credit, including on the allocation and apportionment of interest expense, the definition of a foreign income tax, and the timing of when foreign taxes accrue and may be claimed as a credit."

The IRS yesterday, in Notice 2020-46, provided guidance under the tax code on the federal income and employment tax treatment of cash payments made by employers under leave-based donation programs to aid victims of the COVID-19 pandemic. It provides that cash payments employers make to charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation, or personal leave which their employees forgo will not be treated as wages (or compensation, as applicable).

Publication note: Beginning Monday, this Alert will be called simply "What to Expect in Washington," reflecting the fact that lawmakers are turning attention to additional issues and so are we.

EY Alerts and other resources are here.

The global EY Tax COVID-19 Response Tracker has been updated through June 11.

Today (June 12) at 12:00 p.m. ET is the EY Webcast "Tax in the time of COVID-19." This week's panelists will explore: (i) what's happening in Congress and with the economy; (ii) what's new with the states; (iii) IRS developments — what's open(ing); and (iv) any breaking developments. Register

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