More FAQs about laws that you must know about to properly function in today’s volatile climate. We don’t mean to alarm you, but the answer is “Yes- the Department of Labor will be actively enforcing violators of FFRCA.” Read on please.
Q: When will the DOL begin enforcing the FFCRA?
A: The DOL is offering a 30-day non-enforcement period, ending on April 17, 2020, for good faith compliance efforts. An employer who is found to have violated the FFCRA acts “reasonably” and “in good faith” when:
- The employer remedies any violations, including by making all affected employees whole as soon as practicable.
- The violations of the Act were not “willful” based on the criteria set forth in McLaughlin v. Richland Shoe, 486 U.S. 128, 133 (1988) (the employer “either knew or showed reckless disregard for the matter of whether its conduct was prohibited…”).
- The DOL receives a written commitment from the employer to comply with the FFCRA in the future.
If the employer either (i) violates the Act willfully, (ii) fails to provide a written commitment to future compliance with the Act, or (iii) fails to remedy the violation upon notification by the DOL, the employee seeking payment, or a representative of that employee, including by making all affected employees whole as soon as practicable, the DOL reserves its right to exercise its enforcement authority.
Q: How long do I have to wait to begin taking advantage of the FFCRA tax credit?
A: The IRS has issued guidance that in order to take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. Eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
Q: What payroll taxes are available for retention?
A: The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.
If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced the week of March 30, 2020.
Q: What are the provisions of the IRS’s new People First Initiative?
A: On March 25, 2020, the IRS initiated the new People First Initiative, designed to assist during the COVID-19 pandemic. Much is unknown regarding specifics about the implementation of the People First Initiative. However, the IRS has released the following information regarding key provisions:
- Existing Installment Agreements – For taxpayers under an existing Installment Agreement, payments due between April 1 and July 15, 2020 are suspended. Taxpayers who are currently unable to comply with the terms of an Installment Payment Agreement, including a Direct Debit Installment Agreement, may suspend payments during this period if they prefer. Furthermore, the IRS will not default any Installment Agreements during this period. By law, interest will continue to accrue on any unpaid balances.
2. Offers in Compromise (OIC) – The IRS is taking several steps to assist taxpayers in various stages of the OIC process:
Pending OIC applications – The IRS will allow taxpayers until July 15 to provide requested additional information to support a pending OIC. In addition, the IRS will not close any pending OIC request before July 15, 2020, without the taxpayer’s consent.
OIC Payments – Taxpayers have the option of suspending all payments on accepted OICs until July 15, 2020, although by law interest will continue to accrue on any unpaid balances.
Delinquent Return Filings – The IRS will not default an OIC for those taxpayers who are delinquent in filing their tax return for tax year 2018. However, taxpayers should file any delinquent 2018 return (and their 2019 return) on or before July 15, 2020.
3. Field Collection Activities – Liens and levies (including any seizures of a personal residence) initiated by field revenue officers will be suspended during this period. However, field revenue officers will continue to pursue high-income non-filers and perform other similar activities where warranted.
4. Passport Certifications to the State Department – IRS will suspend new certifications to the Department of State for taxpayers who are “seriously delinquent” during this period. Certification prevents taxpayers from receiving or renewing passports.
5. Private Debt Collection – New delinquent accounts will not be forwarded by the IRS to private collection agencies to work during this period.
6. Field, Office, and Correspondence Audits – During this period, the IRS will generally not start new field, office, and correspondence examinations. It will continue to work refund claims where possible, without in-person contact. However, the IRS may start new examinations where deemed necessary to protect the government’s interest in preserving the applicable statute of limitations.
7. Earned Income Tax Credit and Wage Verification Reviews – Taxpayers have until July 15, 2020, to respond to the IRS to verify that they qualify for the Earned Income Tax Credit or to verify their income.