Filing Deadlines Extensions

Date01 June 2020
Published date01 June 2020
June 2020 3
Bruce R. Hopkins’ Nonpr ofit Counsel DOI:10.10 02/n pc
between 500 and 10,000 employees, not to exceed
$500 billion (Act § 4003). This is to be done to provide
liquidity to businesses related to losses incurred as a
result of COVID-19. An eligible business is a US business,
including “nonprofit organizations,” that “has not oth-
erwise received adequate economic relief in the form of
loans or loan guarantees” provided in the CARES Act.
Health Care System Support
Title III of the act entails provisions in support of the
nation’s health care system, collectively the Coronavirus
Aid, Relief and Economic Security Act. This body of
law includes (1) mandate of a report by the National
Academies of Sciences, Engineering, and Medicine on
the security of the US medical product supply chain (Act
§ 3101); (2) law revisions designed to prevent medical
device shortages (Act § 3121); (3) authorization of
grants to advance telehealth networking (Act §§ 3212,
3213); and (4) a directive for development of a compre-
hensive and coordinated plan with respect to the health
care workforce development programs of the Depart-
ment of Health and Human Services, including education
and training programs (Act § 3402).
Net Operating Losses
The net operating loss law is amended to provide
an extended carry-back rule in the form of a five-year
carryback period for NOLs arising in 2018–2020. More-
over, the 80-percent-of-taxable-income limitation on the
use of NOLs, imposed in 2017, has been suspended for
tax years beginning before January 1, 2021. These law
changes, pertinent to the calculation of unrelated busi-
ness taxable income, are designed to create liquidity in
the form of tax refunds (Act §§ 2303, 2305).
Claims allowed pursuant to these temporary law
changes are made on Form 1139 or 1045. Starting
April 17, and until further notice, these claims are to be
submitted via fax. This temporary process is designed to
generate refunds as soon as possible.
Federal Reserve Initiatives
The Federal Reserve, on April 9, acted to provide up to
$2.3 trillion in loans to support the economy. These actions
are intended to bolster the effectiveness of the Paycheck
Protection Program by supplying liquidity to financial insti-
tutions through term financing. A Paycheck Protection Pro-
gram Liquidity Facility will extend credit to institutions that
originate PPP loans, taking the loans as collateral.
The Fed will also ensure that credit flows to small and
midsized businesses with the purchase of up to $600 bil-
lion in loans through the Main Street Lending Program.
The Treasury Department is proving $75 billion in equity
to the facility.
This program is designed to facilitate lending to US
businesses with no more than 10,000 employees or less
than $2.5 billion in 2019 revenue. These four-year loans will
be at least $1 million in amount and may be as much as
$25 million. Principal and interest payments will be deferred
for one year. Businesses seeking these loans must commit
to make reasonable efforts to maintain payroll and retain
workers. Entities that have taken advantage of the PPP may
also take out Main Street loans.
The act creates a Congressional Oversight Com-
mission, with the responsibility to conduct oversight of
implementation of this law, including efforts to provide
economic stability (Act § 4020).
The act also establishes within the Department of
the Treasury the Office of the Special Inspector General
for Pandemic Recovery (Act § 4018). The duties of this
office include the conduct, supervision, and coordination
of investigations of the making of loans, loan guaran-
tees, and other investments by the Treasury Department
under Act programs.
The act further established a Pandemic Response
Accountability Committee, which is to conduct oversight
of CARES Act funding (§ 15010(b) of Division B of the
act). Members of this committee include various inspec-
tors general of the federal government.
In the signing statement accompanying the CARES Act,
President Trump observed that the act includes “several
provisions that raise constitutional concerns.” He objected,
for example, to provisions that require executive branch
employees to consult with members of Congress regarding
hiring decisions as being violative of separation-of-powers
principles. These provisions are regarded by the administra-
tion as “hortatory but not mandatory.”
The IRS extended the filing deadline of April 15 in
connection with individuals’ and for-profit corporations’
income tax returns to July 15 (Notice 2020-17). This
extension, however, does not apply to other types of tax-
payers and other categories of taxes. This state of affairs
was thereafter reiterated, except for circumstances
where a Form 990-T, 990-PF, or 4720 was due to be filed
on April 15 (Notice 2020-18).
A clamor quickly ensued for a similar extension of
time with respect to the Form 990 series of returns
in general. In response, the IRS issued a fourth notice
(Notice 2020-23), amplifying a third notice (Notice 2020-
20), extending 990 series relief, as to the July 15 date.
The latest of these notices references Rev. Proc.
2018-58, which in turn characterizes tax-exempt organ-
izations as “affected taxpayers.” This, in turn, causes
these filings to be “time-sensitive actions” warranting
the extension. [28.2(a)(iv)]

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