July 16, 2020
What to expect in Washington (July 16)
Politico reported that while "congressional leaders from both parties privately believe they'll reach a deal at some point" on a next coronavirus response bill after negotiations begin next week, "it may take several weeks of difficult negotiations — and public posturing — to strike an accord." Senate Majority Leader Mitch McConnell (R-KY) still plans to unveil a proposal next week around the $1 trillion mark and insists on employer liability protections, while Speaker Nancy Pelosi (D-CA) continues to highlight the $3 trillion HEROES Act the House passed two months ago and insist upon an extension of expanded unemployment benefits and more direct payments. Pressures for lawmakers to act include the expiration of expanded unemployment benefits and the impending August recess, which Speaker Pelosi said she would cancel if there is no deal on more relief: "We can't leave the House without it. We cannot leave Congress without it."
The July 16 Washington Post reported that "the White House and Senate Republicans are developing plans to prod schools to reopen by attaching incentives or conditions to tens of billions of dollars of new aid" as part of the next bill and otherwise debating how to use the legislation to encourage schools to reopen. Senator McConnell said July 15, "It can be safely done and so you have to weigh the consequences. What are the consequences of staying home versus being back in school?" The issue threatens to become an additional political flashpoint.
Lawmakers have introduced numerous bills for consideration in a next package, and Rep. Tom Rice (R-SC) is set to release today (July 16) his proposal for a refundable payroll tax credit towards safety measures like coronavirus tests and personal protection equipment, which he previewed during a Ways & Means subpanel hearing a month ago. Senators Cramer and Sinema introduced a similar proposal earlier this month.
The July 16 Wall Street Journal editorial page, warns against extending the $600 unemployment benefit add-on that Speaker Pelosi is holding firm on "until the White House moves her way," and questions whether "any more spending or temporary tax relief is warranted;" it also includes and an op-ed suggesting that presumptive Democratic nominee Joe Biden, if he wins, would welcome the opportunity to use the huge virus-related federal budget deficit as "the excuse to reverse the 2017 tax reform."
White House press briefing at 1 PM today (July 16).
On July 15, Ways & Means Committee Chairman Richard Neal (D-MA) called on the Treasury Inspector General for Tax Administration (TIGTA) and Office of the Inspector General (OIG) for oversight of Treasury's response to President Trump's July 10 tweet saying: "Too many Universities and School Systems are about Radical Left Indoctrination, not Education. Therefore, I am telling the Treasury Department to re-examine their Tax-Exempt Status … and/or Funding, which will be taken away if this Propaganda or Act Against Public Policy continues. Our children must be Educated, not Indoctrinated!"
Also July 15, the House Appropriations Committee approved 30-22 the FY2021 Financial Services and General Government bill that includes $12.1 billion for the IRS, $606.4 million above the FY2020 enacted level. The additional funding goes toward areas like enforcement and business systems modernization.
The IRS has issued final regulations (TD 9903) that reduce the user fee amount to apply for or renew a preparer tax identification number (PTIN), effective August 17, 2020.
The global EY Tax COVID-19 Response Tracker has been updated through July 9.