June 2020 / United States

The US Internal Revenue Service (IRS) has updated frequently asked questions (FAQs) that provide relief for non-resident individuals and foreign corporations providing services or performing other activities in the United States. Where those services or activities are provided by individuals who are temporarily in the United States solely due to travel disruptions caused by the COVID-19 pandemic those actions will under certain circumstances be ignored for purposes of determining whether a non-resident individual or foreign corporation will be deemed to be engaged in a US trade or business (USTB), or as having a US permanent establishment under US income tax treaties.   The updated FAQs expand this relief by providing that the income earned from the activities in question will not be subject to the 30% gross basis tax imposed under section 871(a) or section 881(a) of the US Internal Revenue Code, solely because the non-resident individual or foreign corporation is not treated as having a USTB or permanent establishment under the relief provided in the FAQs.   The FAQs were last reviewed or updated on 12 June 2020. The IRS notes that it may update these FAQs based on the evolving effects of the COVID-19 emergency.

The US Internal Revenue Service (IRS) has provided guidance on the waiver of required minimum distributions (RMDs) under certain retirement plans, i.e. withdrawals that are required to taken by plan participants after they reach a maximum retirement age.   Notice 2020-51 allows taxpayers who receive certain plan distributions to roll them into an eligible retirement plan, provides a 60-day extension of the roll-over period to 31 August 2020, answers a number of related questions regarding the waiver of 2020 RMDs, and provides a sample plan amendment under which participants and beneficiaries can choose whether or not to receive distributions.   The roll-over relief is being provided in order to align with the intent of the CARES Act that permitted taxpayers to waive such distributions in 2020, according to the notice. This notice follows recent guidance on relief provided under the CARES Act for early distributions and loans from retirement plans.

The US Internal Revenue Service (IRS) has issued a factsheet (FS-2020-08) providing information on the scheduling and electronic payment of federal taxes due by 15 July. A variety of federal tax filing and payment deadlines falling on or after 1 April 2020, and before 15 July 2020, have been postponed until 15 July 2020 in response to the ongoing Coronavirus (COVID-19) emergency. The factsheet notes that this automatic filing and payment relief applies to all taxpayers and that they do not need to file any additional forms or call the IRS to qualify for the relief. The factsheet provides information on how to schedule or reschedule and electronically pay taxes due, including estimated tax payments, as well as procedures for taxpayers who cannot pay the full amount or who want more time to file. The IRS had previously published answers to frequently asked questions (FAQ) related to the relief.