The Treasury Department doesn’t plan to extend tax relief any further for workers trapped in the U.S. by pandemic travel restrictions, an official said Thursday.
“We are not considering extending that relief, but we are continuing to monitor the situation,” attorney-adviser Jim Wang said in a panel discussion on the tax implications of trapped workers hosted by the D.C. Bar.
In April, the IRS released relief measures (Rev. Proc 2020-20, Rev. Proc. 2020-27) that allowed nonresident individuals, foreign corporations, and partnerships to select a 60-day period between Feb. 1 and April 1 where the agency wouldn’t consider their activity in the U.S. to trigger a tax liability. The agency updated its relief information earlier this month.
Wang said the measures are contingent on border restrictions around the world, which have continued to evolve along with the pandemic.
“It’s important to note that all that relief is premised on a certain state of the world with certain kinds of travel disruptions,” he said. “We see that travel disruptions are beginning to get better, although of course they still exist.”
Dan Gottfried, a partner at Day Pitney LLP, said the IRS could implement a more flexible relief policy based on how countries have recovered from the pandemic.
“They might do country-by-country relief,” he said in an earlier interview. “Taxpayers could make the case that if a particular country is either harder to get to or more dangerous to go to, then I guess that could be possible.”
In a previous interview, Amie Colwell Breslow, of counsel at Jones Day, noted that a specific form of relief, like country-by-country, would help prevent abuses of the aid.
“It would be something that would have to be limited,” Breslow said of possible relief extensions. “I could see abuses if it’s just widely open to anyone, even to those from countries that allow a reasonable quarantine period or have testing.”