Tag: Accounting

SEC Provides Conditional Relief and Assistance For Companies Affected By COVID-19

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Filing Relief for Registrants Impacted by the Coronavirus

The SEC issued an exemptive order (the Order) on March 4, 2020 providing conditional relief for registrants that are impacted by the coronavirus (COVID-19) and are unable to file on a timely basis.  The Order provides companies with an extension of the due date of 45 days to file certain SEC disclosure reports that would have been due between March 1 and April 30, 2020. If a registrant intends to take advantage of this relief, the filing must disclose why it was unable to file on a timely basis. 

Additional steps must be taken to take advantage of the extension, including a requirement to furnish Form 8-K1 by the later of March 16, 2020 or the original reporting deadline, which includes the following information:

  1. A statement that the registrant is relying on the Order;
  2. A brief description of the reasons why the registrant cannot file on a timely basis;
  3. The estimated date the registrant expects to file;
  4. If appropriate, a risk factor explaining the impact of the coronavirus on the registrant’s business (if material); and
  5. If the reason the registrant is unable to file relates to a person other than the registrant, the Form 8-K must include an exhibit signed by that person containing the specific reasons why that person in unable to provide its opinion, report, certification, etc.

The due date for annual or quarterly reports for companies that receive an extension pursuant to the Order will be 45 days after the filing deadline for the report.  Those companies will be permitted to rely on the grace period in Exchange Act Rule 12b-25 to receive additional time to file the report (fifteen calendar days for an annual report and five calendar days for a quarterly report). Companies that take advantage of the extension permitted by the Order or the grace period permitted by Rule 12b-25 will still be considered current and timely Exchange Act filers for purposes of Form S-3 and Form S-8 eligibility.  

The Order also provides relief from the proxy and information statement delivery requirements for those delivering materials to the affected areas.

Further information can be found in the press release and exemptive order.  Registrants are encouraged to contact the SEC staff within the Division of Corporation Finance2 for any additional relief, assistance or other guidance. 

Disclosure Reminders for Registrants Impacted by the Coronavirus

The SEC’s press release announcing the Order also reminded all companies of their disclosure obligations under the federal securities laws:

  • If a company has become aware of a coronavirus related risk that would be material to its investors, it should refrain from engaging in securities transactions with the public.  Additionally, companies should take steps to prevent directors, officers, or other insiders from initiating such transactions until investors have been appropriately informed about the risk.
  • Companies should disseminate material information related to the impact of the coronavirus broadly and on a timely basis.  Previous disclosures may need to be revisited or updated. 
  • Companies providing forward-looking information or known trends and uncertainties regarding the coronavirus in an effort to keep investors informed can avail themselves of the safe harbor in Section 21E of the Exchange Act.

IRS and PA Officially Extend Filing and Payment Deadlines to July 15

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Extension Updates:

IRS and PA Officially Extend Filing and Payment Deadlines to July 15

  • Federal Filing and Payment Extension Through July 15, 2020 – The automatic extension from April 15th to July 15th applies to individuals, corporations and trusts/estates, the first quarter 2020 estimate tax filing, and any associated tax payments. This new deadline allows for all taxpayers and businesses to have additional time to file and make payments without interest or penalties. See IRS notice with details here: https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020
  • Pennsylvania Extends Personal Income Tax Return Filing Deadline to July 15, 2020 – The Department of Revenue today announced the deadline for taxpayers to file their 2019 Pennsylvania personal income tax returns is extended to July 15, 2020. This means taxpayers will have an additional 90 days to file from the original deadline of April 15. The Department of Revenue will also waive penalties and interest on 2019 personal income tax payments through the new deadline of July 15, 2020. This extension applies to both final 2019 tax returns and payments, and estimated payments for the first and second quarters of 2020. See PA announcement with precise detail here: https://www.media.pa.gov/Pages/Revenue-Details.aspx?newsid=307
  • Other State and Local Tax Deadline Extensions Have NOT Been Finalized.  Our team is monitoring this evolving situation as well as developments from all agencies around economic stimulus proposals.  We will distribute updates and details as they become available. For the most recent updates, please check our website: https://www.urishpopeck.com/news/
  • Office Update – We are continuing to operate our practice remotely. Moving forward, all processing of tax returns will be completed and distributed electronically whenever possible.  We will utilize our secure data website (www.securetaxdata.com) to deliver PDF copies of completed tax returns and ask that you use this same website to upload and transmit documents to us whenever possible.  Documents requiring signatures will be provided via email, utilizing e-signature applications. We strongly encourage the electronic transmission of information.  We are still accepting paper copies of documents, but due to mail delivery changes and potential delays, we cannot ensure timely access to the information.  If other arrangements need to be made, please contact your engagement professional directly.

COVID-19 Payment Relief Released By IRS

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On March 18, 2020, the Internal Revenue Service released Notice 2020-17, formal guidance describing relief provided to taxpayers for federal income tax payments due April 15, 2020.  Notice 2020-17 is available here.

Under the guidance, the President’s March 13, 2020, Emergency Declaration instructed the Treasury Secretary to provide relief to taxpayers affected by the novel coronavirus (COVID-19). The notice provides that any person with a federal income tax payment due April 15, 2020, is an “Affected Taxpayer.”  For Affected Taxpayers, the relief provides that “Applicable Postponed Payment Amounts” are postponed until July 15, 2020. This 90-day deferral therefore applies to income tax payments of up to $10 million for each consolidated group of corporations or for each C corporation that does not join the filing of a consolidated group and up to $1 million for all other Affected Taxpayers regardless of filing status (i.e., single individuals and married individuals filing a joint return each may defer $1 million).

The relief under Notice 2020-17 is solely with respect to federal income tax payments (including payments of tax on self-employment income) due April 15, 2020, in respect to an Affected Taxpayer’s 2019 tax year and estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, with respect to an Affected Taxpayer’s 2020 taxable year. The Applicable Postponed Payment Amounts include the total of all payments described in the notice (i.e., $10 million or $1 million, as applicable).

The notice expressly states: “No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any tax return or information return.”  Returns due to be filed April 15, 2020, remain due April 15, 2020. An extension may be requested as it ordinarily would be.

The IRS also clarifies that any interest, penalty, or addition to tax for failure to pay income taxes postponed by the Notice will begin to once again accrue on July 16, 2020. In addition, any interest, penalties, and additions to tax above the Applicable Postponed Payment Amount (i.e., $10 million or $1 million, as applicable) will not be suspended and will accrue if not paid by an Affected Taxpayer on April 15, 2020.

The IRS reminds taxpayers who may be subject to penalties or additions to tax – despite the relief announced in the notice – that they may seek reasonable cause for failure to pay penalties or estimated tax penalties. Corporations and tax-exempt organizations, however may not seek such relief for estimated tax payments.

Additionally, the following states have announced business and individual income tax return filing extensions and/or late filing/payment penalty relief:  California, Connecticut, Maryland, North Carolina, Oregon, South Carolina, and Washington. Further, San Francisco and Seattle have announced filing extensions for local business taxes, while a number of other states have indicated they will adhere to federal extension guidance on tax payments once formalized by the Internal Revenue Service.