Summer Newsletter 2020

In response to the Coronavirus (COVID-19), the tax controversy group has put together a chart detailing tax controversy-related developments as they arise. Please refer to the following list of tax and tax controversy-related alerts and original articles for additional insight and guidance:

On May 12, 2020, the IRS released proposed regulations (REG-104591) affecting the deductibility of payments made to governments in settlement of alleged violations of law. The proposed regulations interpret Sections 162(f) and 6050X of the Internal Revenue Code of 1986 (the Code), as amended and introduced by the Tax Cuts and Jobs Act (TCJA), respectively.

***This legal development is still in progress. We will update this Alert as the Act makes its way through the legislative process.***

On Friday evening (May 15, 2020), the House passed, in a 208-199 vote (mostly along party lines, though 14 Democrats and one Independent voted “No” and one Republican voted “Yes,” with 23 Members abstaining), the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act). The HEROES Act is commonly referred to as Phase 4 of the federal government’s response to the COVID-19 outbreak.

  • Complete language for the HEROES Act can be found here.

The Senate Republicans have declared this act “dead on arrival” (DOA), and the White House has threatened to veto the act.

Nonetheless, further below are highlights of 17 notable tax-related provisions: (i) provisions that may be negotiated further (based in part on current Congressional comments in the press, contrary to the DOA comment above); as well as (ii) provisions that are simply notable because they would change tax law in the CARES Act that one may not expect.
Continue Reading House Passes Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act)