Breaking Covid-19 Tax News Update: IRS’ “Substantial Presence 60-Day Covid-19 Waiver is Set to Expire

Jack Brister

Founder, International Wealth Tax Advisors

Jack Brister, Founder of International Wealth Tax Advisors, is a noted international tax expert, with over 25 years of experience. Jack specializes in U.S. tax planning and compliance for non-U.S. families with international wealth and asset protection structures. Jack is a frequent featured speaker at numerous international financial conferences and has been named a Citywealth Top 100 U.S. Wealth Advisor.

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Breaking: June 30, 2020

Our previous blog posts, in particular April 20, 2020,  (posted at the height of the tragic intersection of Covid-19 and stranded foreign visitors and business people) outlined unexpected tax issues created by the global pandemic. It looks like the IRS is ending their tax grace period, the 60-day “Covid-19 Emergency Period” for eligible non-resident alien individuals.  In U.S. Treasury Department terms, IRS Rev. Proc. 2020-20  and Rev Proc 2020-27 are coming to an end.

The IRS released relief measures (Rev. Proc 2020-20, Rev. Proc. 2020-27) in April 2020. In brief, the measures allowed non-resident individuals, foreign corporations, and partnerships to choose a 60-day period between Feb. 1 and April 1 in which the IRS would not consider their extended U.S. activity a tax liability. The agency updated its relief information earlier in June 2020.

According to Bloomberg News, an IRS spokesperson declared at a recent Washington DC industry panel, “We are not considering extending that relief, but we are continuing to monitor the situation.”

The spokesperson further commented: “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.”

As of this writing, the 14-day change in new Coronavirus cases in the U.S.A. is at an astounding 80%. Today the European Union announced it will officially open its borders to visitors tomorrow, July 1, 2020. The EU also announced that U.S. travelers are barred from entry. Will the Treasury Department reverse its stance that travel disruptions are “getting better”?  Check our blog and Twitter feed for updates!

Review our previous blog posts covering Covid-19 and and cross-border tax issues:

IWTA Blog Post March 20, 2020

IWTA Blog Post April 1, 2020

IWTA Blog Post April 20, 2020

IWTA Blog Post April 28, 2020

IWTA Blog Post May 1, 2020

IWTA Blog Post, June 11, 2020

IWTA Blog Post June 12, 2020

As a service to our clients, colleagues and all those with an interest in cross-border tax issues, we post updates to breaking  and critical tax news stories. Check the IWTA Tax News Blog Page and sign up for our email newsletter (bottom of blog page) to stay current.