Oregon Office of Taxpayer Advocate: House Bill 3373

 

In early 2021, Representative Fahey sponsored HB3373 in an effort to establish the office of the Taxpayer Advocate in the Department of Revenue. The bill is currently awaiting the governor’s signature and the office will become an active office in the Department of Revenue on January 1st, 2022.

The purpose of the Office of Taxpayer Advocate is to provide understandable and concise information to taxpayers to answer common questions about tax policy, Department of Revenue policies and procedures, audits, collections, and appeals. The office will also assist with questions about preparation and filing of returns and locate documents filed with those returns and audits. Semi-annual reports will be provided to the legislature on any identified issues relating to issues or barriers of equitable and fair collection of taxes. The Taxpayer Advocate office will also be responsible for receiving and evaluating any complaints of improper, abusive, or inefficient service by employees of the department and recommending appropriate action to the director.

The Office will be particularly helpful for low-income Oregonians, says Alicia Temple of the Oregon Law Center in their April 15th testimony letter. Temple points out that many low-income Oregonians have a fear of the Department of Revenue and taxes in general and see the Department as “an agency that is simply out to take their money”. The Office of Taxpayer Advocate is anticipated to appease those fears by increasing transparency and developing trust between taxpayers and the Department of Revenue, which should prove beneficial to all Oregonian taxpayers and tax practitioners. The Office will benefit practitioners by making available additional materials about common tax issues and providing an additional, accessible pathway to relief for clients.

In addition to the creation of the Taxpayer Advocate Office, the bill now authorizes the Oregon Tax Court to order attorney’s fees if an opposing party disobeys any court order or makes claims and assertions without an objectively reasonable basis. Attorney’s fees can now also be awarded in cases involving transit self-employment taxes.

The bill is expected to have no revenue impact, a $571,682 fiscal impact for the 2021-2023 biennium, and a $758,937 fiscal impact for the 2023-2025 biennium. This cost includes furniture and equipment, legal costs, all salaries, and anticipated related expenses.

New Podcast from Chris Cline at Riverview Trust Company

One of the #silverlinings of the 2020 COVID-19 situation is that people are doing some really creative things to help educate folks and make their communities better. In this occasional series, we like to highlight the neat things that friends of our firm are doing.

Christopher Cline is the President and CEO of Riverview Trust Company. Chris has been an important part of the local Trusts and Estates community for quite some time and we have a number of common clients. He just started a podcast to explain some of the basics of estate planning in a really user-friendly way. I like it because these are questions that clients may think are too basic to ask, but really need to know. I’m going to encourage my Mom to take a listen. Chris’s podcast is on Spotify now and will be on and Apple and Google soon. Definitely check it out!

https://riverviewtrust.com/resources/podcast/

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

Helpful Video on Paycheck Protection Program Forgiveness Application

Senior Loneliness Line

We’ve been getting a lot of questions about the Paycheck Protection Program (PPP) and how our clients can maximize the amount that is forgiven. While this is a bit of a moving target, our friends at Geffen Mesher have put together a helpful video on working through the Small Business Association’s (SBA) PPP Forgiveness Application that we wanted to commend to your attention. View the video here.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

Because Your Government CARES

Valerie Sasaki, of Samuels Yoelin Kantor, LLP facilitated a “Cocktails and Conversation” discussion with the Portland Chapter of Women in Insurance and Financial Services, which explored the recent Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act is Congress’ comprehensive legislation to provide relief to individuals, families, and businesses that are adversely affected by the Coronavirus pandemic. Despite frequent news coverage and criticism, the scope and effect of the CARES Act can seem impenetrable because it contains so many separate moving parts. In this discussion, Ms. Sasaki walked through the different components of the CARES Act and explained how each works to combat the economic hardship brought about by the Coronavirus epidemic.

The CARES Act is a $2 trillion economic relief package that creates new aid programs and expands existing programs. State and local governments will receive $339.8 billion, the majority of which goes to specific COVID-19 response efforts. The rest of the state and local government relief is divided between education, community development, and family assistance programs.

Aid to individuals totals around $560 billion. More than half the aid for individuals will come in the form of recovery rebates more commonly known as stimulus payments. In addition, the Act provides for a temporary $600 per week increase to employment benefits.  Independent contractors are eligible for direct government assistance through the end of 2020. On the public health side, the Act mandates that private insurance plans must cover COVID-19 treatments and vaccines and offer tests free of charge.

The second largest component of the Act is $500 billion for large businesses. Most of the relief to big businesses comes in the form of fully refundable tax credits available for 50{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} of payroll compensation, although there is a substantial allotment of given directly to airlines. These larger business relief funds, however, comes with limitations (the “stick” to the “carrot”), which include: a 1-year ban on stock buybacks; additional reporting requirements; and, oversight by a Special Inspector General.

The $377 billion fund for small business is mostly allocated to the Payroll Protection Program (PPP). The PPP is a massive effort to provide forgivable loans to companies with less than 500 employees. To qualify for forgiveness, the companies must use 75{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} of the loan for payroll. The Act also creates a substantial expansion of Economic Injury Disaster Loans (EIDL), an existing program designed to help small business meet expenses during a disaster. The Act reduces interest rates and provides emergency cash advances to EIDL recipients.

For more information about the CARES Act see the slides from Ms. Sasaki’s talk.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

 

Notice and Comment Period for Proposed Corporate Activity Tax (“CAT”) Rules Ends

Time marches on and the time to comment on several of the Oregon Department of Revenue’s Corporate Activity Tax (“CAT”) rules ends today, May 26 at 5pm. While the Oregon State Bar Taxation Section did not officially comment on the rules, three attorneys, including Samuels Yoelin Kantor, LLP’s Valerie Sasaki, did submit comments on the math problem that is Proposed OAR 150-317-1200. Essentially, the CAT is only imposed on a taxpayer’s Oregon receipts. The question of how to calculate that though, has led to what we believe are some unintended, flawed results for taxpayers that have costs and labor concentrated relative to certain income streams.

While the section did not officially comment, several folks whose names don’t appear on the final comments contributed to discussing the comments and accompanying examples, which you can find below as downloads. We are proud to practice as a part of a community that values good tax policy, even in difficult times.

View comments on OAR 150-317-1200 and examples.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

The COVID-19 Oregon Special Session

For those of you who are following the Oregon Legislature’s response to the COVID-19 pandemic, we expect the Governor to announce a special session in the next day or two. Topics that we expect the legislature to address include: provisions for rent and mortgage assistance, bans on evictions, loans to small businesses, food benefits, and expanded healthcare access. The Salem Statesman Journal has been doing a great job tracking the proposals for this emergency session:

https://www.statesmanjournal.com/story/news/2020/03/30/coronavirus-oregon-legislative-response-covid-19-special-sessions/2928604001/

We also expect that the Oregon Laws Commission’s remote notary proposal to be included in the proposal.

As expected, it doesn’t sound like Oregon corporate activity estimates made the cut to address, so Q1 estimates will need to made as usual.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

Changes to Charitable Giving Limits in the CARES Act

The newly passed Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) contains two provisions that will be of interest to folks who want to help their communities this year.  Section 2104 creates an above the line deduction of up to $300 for contributions made in 2020. This is important because after the Tax Cuts and Jobs Act (TCJA) a couple years ago, many folks no longer itemize, which means that they are not eligible to receive a tax benefit for the charitable deductions that they make over the course of the year. So, if you now claim the standard deduction, individual taxpayers can claim a deduction for the amounts up to $300 that they donate to charity. They don’t let you double-dip though, so if you itemize, you would claim your deductions on Schedule A as usual.

Additionally, Section 2105 of the CARES  Act eliminates the cap on individual charitable contributions. Previously, taxpayers couldn’t deduct contributions over 60 percent of their adjusted gross income.  The corporate cap was raised from 10 percent to 25 percent (including the food donation cap, which had been 15{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6}). Section 2105 only applies to contributions made in 2020.

A link to the two sections is here.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

COVID-19: Resources

We’re getting a lot of questions right now about what resources are out there for individuals and businesses. I recommend taking a look at this comprehensive list that Representative Blumenauer’s office is developing and maintaining, for a start: https://docs.google.com/spreadsheets/d/1_vxTr5ze9Po3noASrmc3075x9EMsKZQczUe-QHsWADQ/edit#gid=0

Also, OCF is soliciting applications for nonprofits in need: https://oregoncf.org/grants-and-scholarships/grants/oregon-community-recovery-fund/

For our business clients, business Oregon has some information up at: https://www.oregon4biz.com/Coronavirus-Information/

Here is their Oregon capital access program (mostly loans): https://www.oregon4biz.com/How-We-Can-Help/Finance-Programs/CAP/

Here is the SBA Covid 19 page: https://www.sba.gov/disaster-assistance/coronavirus-covid-19

My guess is that a lot of the federal assistance will come through the SBA in the form of forgivable loans and grants.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

Mnuchin Announces Deadline to File Extended by Tweet

In a tweet at about 10 am Eastern Time this morning, Treasury Secretary Mnuchin announced “We are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”

This has not posted to the Internal Revenue Service or Treasury Department newsroom at this time. Internal Revenue Code Section 6081 gives the treasury secretary the authority to grant a reasonable extension of time for filing any return. IRC 6161 allows the treasury secretary the authority to extend payment of taxes for periods less than six months, which Secretary Mnuchin did on Tuesday, March 17.

Oregon is, per a statement on the Revenews listserv yesterday, still considering whether and how to conform to these extensions.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.

Extension: 90 Day Extension to Pay Taxes

Treasury Secretary Mnuchin announced today that individual taxpayers will now get a 90 day extension of time (through what Excel tells me is Tuesday, July 14, 2020) to pay 2019 income taxes, up to $1 million owed. Corporate filers will get the same period of time to pay up to $10 million in taxes owed.  During the period of time from April through July 14, taxpayers will not be subject to additional interest and penalties on amounts due for 2019. Individuals and businesses will still have to file their income tax returns by April 15, unless they file a request for extension. As usual, if taxpayers are getting a refund, they may not want to extend the deadline to file their income taxes. Secretary Mnuchin said that the delay will free $300 billion of liquidity in the economy.

The Oregon Department of Revenue earlier stated that it will automatically connect to the extended filing and payment dates for individuals. The IRS has not yet ruled on whether it will extend the deadline for 2020 first quarter estimated tax payments. This extension is in addition to the proposed $850 billion stimulus package that is before the Senate.

For more information, see Bloomburg’s article on this.

Valerie Sasaki specializes in jurisdictional tax consulting, working closely with Fortune 50 companies involved in audits before the Oregon or Washington Departments of Revenue. She also works with business owners on tax, business, and estate planning issues in Oregon or Southwest Washington.