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IRS extends more tax deadlines; EO operations affected during COVID-19 and more

Last month, the IRS announced that certain taxpayers generally have until July 15, 2020, to file and pay federal income taxes originally due on April 15. The IRS has extended this relief to additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. The extensions apply to many forms and tax payments made by tax-exempt organizations, including:

  • Form 990-series annual information returns or notices (Forms 990, 990-EZ, 990-PF, 990-BL, 990-N (e-postcard))
  • Forms 8871 and 8872
  • Form 5227
  • Form 990-T
  • Form 1120-POL
  • Form 4720
  • Form 8976

See Notice 2020-23 and Rev. Proc. 2018-58 for more information, including a complete list of affected forms, tax payments and other time-sensitive actions.

IRS operations during COVID-19: mission-critical functions continue

In response to the coronavirus (COVID-19) crisis, the

U.S. Congressional CARES Act & Nonprofit Organizations

Loan Programs

Small Business Loan Program Expansion – “Paycheck Protection Program”: Provides 100% guarantee for bank loans made to qualifying business/organizations during the period of February 15, 2020 to June 30, 2020.  To qualify, nonprofits must not have more than 500 total full-time and part-time employees.  Nonprofit organizations with more than 500 employees are not eligible for this program. Detailed guidance from the firm on this program can be found here.

Emergency Economic Injury Grants – “Disaster Loans”: Nonprofits with fewer than 500 employees who apply for an economic injury disaster loan with the SBA may receive up to $10,000 as an advance against the loan within 3 days of application if SBA certifies that the entity is eligible.  This is to enable nonprofits to quickly access financial assistance while their loan application is being processed.  Eligibility is based solely on applicant’s credit score.  Funds can be used for payroll

COVID-19 Update – How the CARES Act Effects Tax Benefits Related to Charitable Giving

On Friday, March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or “Act”). The Act was one of several Congressional responses to the COVID-19 emergency and it covered many areas, including the tax benefits related to charitable giving.

Generally, there are limitations on deductions for charitable contributions for both individual and corporate taxpayers based on the taxpayer’s adjusted gross income (“AGI”), in the case of individuals, and taxable income, in the case of corporations. The CARES Act increases the limit on individual taxpayers’ deductions for cash contributions to public charities from 60% of the individual’s AGI to 100% of the individual’s AGI. This increase effectively suspends the limit for individuals in 2020.  For corporate taxpayers, the CARES Act increased the income limits on the deduction for charitable cash contributions from 10% of the corporation’s taxable income to 25% of the corporation’s

Update: Tax Filing Date Also Extended to July 15th

As an update to our earlier blog posted, U.S. Treasury Secretary Steven Mnuchin announced this morning that the U.S.is extending the April 15th tax-filing deadline to July 15th.  This extension is in addition to the earlier announced tax payment extension.

Tax payers now will have until July 15th to not only file their federal income tax forms but also make tax payments.  While it is still suggested to file and make payments as early as possible, individuals can defer up to $1 Million.  This encompasses self-employed individuals, and all entities (other than C corporations), such as trust or estates. C corporations get an extension up to $10 million.  While states are encouraged to follow suit, it is important to remember that this tax filing/payment period extension only applies to federal income tax returns.

Another important note is that this relief also applies to estimated tax payments for 2020 that are

Income Tax Payment Period Extended, Tax Filing Deadline Is Still April 15th

https://www.google.com/search?q=covid-19&rlz=1C1GGRV_enUS762US762&sxsrf=ALeKk02_wIZU5Hcu5kBjZ3TWH-MXOo4S-g:1584709840151&source=lnms&tbm=isch&sa=X&ved=2ahUKEwiWnOCYkKnoAhWWW80KHX1tDVgQ_AUoAnoECA8QBA&biw=1435&bih=650#imgrc=t2x444RPeS4z7M

As a strategy to help combat the economic effects of COVID-19, the U.S. Secretary of the Treasury Steven Mnuchin announced on Monday, March 16th, that taxpayers are getting a 90-day extension for paying their 2019 income taxes.  The goal is to free up $300 billion in liquidity and to lessen the cash-flow burdens facing the country as businesses are temporarily forced to close or slash their workforce.

What does this mean?

While the deadline to file your taxes is still April 15th, 2020, tax payments that are made by July 15th will have no interest or penalty.  As of today, individuals can defer up to $1 Million, while C corporations get an extension up to $10 million.  The $1 million deferral for individuals is to help those

BCLP Partner Tiffany McKenzie in Atlanta Bar’s Newsletter

Atlanta partner Tiffany McKenzie was featured in The Mortmain, which is the Atlanta Bar Association Estate Planning and Probate Section’s newsletter. This article discusses McKenzie’s lecture, held on December 11, 2019 at the Estate Planning Section’s breakfast meeting, detailing how to create the ultimate digital estate planning checklist for clients. The complete article can be found here.

Client Alert – Section 4940 Excise Tax Simplification

Section 4940 of the Code imposes an excise tax on the “net investment income” of private foundations.  Historically, the excise tax was 2%, with an opportunity for reduction to 1% for a year in which the foundation’s qualifying distributions exceeded a certain amount calculated pursuant to a complicated formula.  Recent tax legislation simplifies the two-tiered system by replacing it with a flat rate of 1.39%.  The new rate is effective for tax years beginning after the date of enactment; which would be 2020 for calendar year private foundations.

This article was originally published by BCLP’s Charity Law Blog on January 21, 2020. The original article can be found here.

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