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Daily Tax Report: International

Virus Puts Pressure on Corporate Tax Advisers Working Remotely

March 27, 2020, 6:16 PM

Marji Gordon-Brown has only soap and water to sanitize her hands after she sorts mail critical to her job—and to stay healthy during a global pandemic.

With her stock of disinfectant wipes depleted, the anxiety of carrying out her duties as vice president and associate tax counsel at a New York-based private equity firm is beginning to take a toll.

“My hands are literally raw from all the hand-washing,” she said. “Who knew I should have a stockpile” of disinfectant wipes. Gordon-Brown said her firm still must use paper checks and physical signatures to comply with some state laws.

“Daily, I’m getting several pieces of mail that need to be addressed in a fairly short period of time,” she said. “I don’t know if I’m going to meet it.”

While governments around the world scramble to contain the new coronavirus, corporate officials are trying to keep up with a raft of new regulatory guidance, keep operations running smoothly with their businesses and employees, and make sure routine paperwork gets filed while they’re working from home. The last part is proving to be challenging.

“The logistical issues are significant, also this is made more complex by all the guidance coming out,” said Carol Doran Klein, VP and international tax council at the U.S. Council for International Business whose members include about 300 multinational companies, law firms, and business associations.

‘Everybody is Really Struggling’

As offices across the world close, corporate tax teams working from home are finding hurdles to comply with rules and procedures that require physical checks, analog signatures, and documents to be submitted by mail.

Pilar Mata, a state and local tax counsel at the Tax Executives Institute, said many of the group’s members feel pressure to sign physical checks and send mail under stay-at-home orders.

“It’s not just access to documents but access to people and other details that they don’t really have at their fingertips,” Mata said. “Everybody is really struggling with the new reality of the situation of either working from home and in some cases, shelter-in-place requirements.”

And some things just need to be filed in paper—like submissions for advance pricing agreements, in which a government signs a contract with a company to pre-approve their intercompany pricing arrangements.

That is complicated by the fact that companies must send in several hard copies of those submissions, said Sean Foley, a principal in global transfer pricing services at KPMG. That’s created a printing challenge.

“Now we’re all working at home, and our home machines will not handle that kind of work,” he said. “Just like our clients, with their offices closed, don’t have access to secure printing.”

Officials of the Advance Pricing and Mutual Agreement Program at the IRS said they’d accept a fully electronic submission for the purpose of establishing a filing date, but wouldn’t advance the case until they received a full paper copy, Foley said.

The IRS wasn’t available for immediate comment.

Deadline Uncertainty

The need to communicate with regulators for deadline extensions, and for grace when those deadlines aren’t met, is adding to the anxiety. Treasury is “reviewing all upcoming deadlines and potential relief for taxpayers,” a spokesperson for the Treasury Department told Bloomberg Tax by email on March 27.

As many retailers, for example, have had to shutter storefronts to slow the spread of the virus. They are seeking tax filing and payment delays to ensure they have the liquidity to hold onto employees and save their businesses. But it’s unclear whether the extension to July 15 of the filing and payments deadlines that Treasury announced on March 20 will apply to companies that operate on a fiscal rather than a calendar year, such as many retailers.

“Treasury and IRS have been in constant contact with taxpayers and have issued formal and informal guidance expeditiously to help Americans address challenges,” the Treasury spokesperson said.

But direct communication with Treasury officials that could provide some direction for retailers has been tough, adding to the overall headwinds the sector is experiencing, Rachelle Bernstein, vice president and tax counsel at the National Retail Federation said.

“We’re having quite a time connecting to anybody at the Treasury Department that might be able to address that issue,” she added.

Gordon-Brown said deadlines will ultimately need to be extended, and every tax stakeholder will need to extend some grace: From preparers to the authorities and auditors, filing and paying taxes for the next few months will need to be a fluid process.

“I don’t know when we’re going to be back in the office to go through mail or send things out,” she said. “I don’t know what it’s going to feel like to get back to work—that is going to cause anxiety. How do we really know it’s safe to go back to work?”

To contact the reporters on this story: Isabel Gottlieb in Washington at igottlieb@bloombergtax.com; David Hood at dhood@bloomberglaw.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; David Jolly at djolly@bloombergtax.com

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