Last week President Trump declared a national emergency in response to the COVID-19 virus pandemic, and over the weekend the House of Representatives passed broad legislation to address the economic damage to the economy. Although tax and immigration are not top of mind for many people at this time, it is helpful to highlight the impact to many Canadian businesses and entrepreneurs with cross-border investments.
From a US tax perspective, the declaration of a national emergency provides the IRS with the authority to provide various administrative tax relief to taxpayers. The American Institute of CPAs highlighted these relief options and was disappointed that the IRS and Treasury still haven’t extended tax filing and payment deadlines. Some of the important relief provisions that we are expecting to happen are as follows:
- Extending US tax return filing deadlines;
- Extending US tax payment deadlines; and
- Waiving penalty and interest charges normally applied to late filings and payments
We understand that the Canada Revenue Agency may also be working on administrative tax relief so businesses with cross-border activities should be mindful of how these changes will impact their tax reporting plans.
Cross-border immigration is also being impacted and the situation at the border is changing rapidly. For now, the following changes have been implemented:
- Travel ban between Europe (sans UK and Ireland) and the US went into effect at midnight this past Friday (March 13);
- Travel ban between UK/Ireland to US will take effect on Monday (March 16, 2020) at midnight;
- US Embassies, Consulates, and Missions are closed in Jamaica;
- US Embassies, Consulates, and Missions in India, Italy, France, and China have cancelled all immigrant and nonimmigrant visa appointments (we expect this to become far more widespread);
- US Embassies and Consulates in Canada are beginning to cancel non-emergency immigrant and nonimmigrant visa appointments; and
- Beginning to hear reports of COVID-19 spreading in US Immigration and Customs Enforcement (“ICE”) holding facilities
We are keeping an eye on the rapidly changing situations and will release information for our clients as they become available. Stay tuned.