CBA Record May-June 2020

The Coronavirus Pandemic: History is Written by the Victors By Nina J. Fain and Clare McMahon A lthough this is not a war, it can feel like a war effort, with its extreme measures, fast-changing rules, Tax Practice

Tom Kinasz is a partner in Holland & Knight’s Chicago office. He con- centrates his practice on federal and state taxa- tion matters, counseling for profit and nonprofit

uncertainty, and sacrifice. As a result of shelter-in-place orders, we are supporting our clients (whether individuals or enti- ties) through a virtual workplace that for many of us was almost nonexistent three months ago. Although it may seem as if the world will never again be the same after the pandemic, navigating how it will change and how we can act in the best interests of ourselves, our businesses, our clients, and our communities can be hard to ponder in the midst of a crisis. The globalization of business and modern technology do not render useless the history lessons from prior pandemics. We are charged with anticipating and spotting issues to help shape solutions for clients (and ourselves), bringing calm to panic and predictability to uncertain times. As we redefine ourselves personally and professionally, we can make thought- ful predictions and help clients adjust as they make their way in a new economy over the next decade. Our community is resilient, and now more than ever before, smart, critical thinkers – lawyers among them – are called upon to make informed predictions and decisions about the future, some of which may become self-fulfilling. We posed two questions to a panel of colleagues who practice in taxation, public policy, education, and legal aid. They offer both practical advice and broad views for a vision of the future of our country. An edited version of their responses follows: 1. How do you think your area of practice/ position will be affected in the long term considering the social changes that have taken place under quarantine? 2. What do you think are the larger or society-wide implications of the changes you are seeing as a result of quarantine (regardless of whether your thoughts are related to your answers to the first question)?

Tom Kinasz

organizations, individuals, and businesses on a wide range of taxation issues including income tax and estate planning, charitable giving, and mergers, acquisitions, and reor- ganizations of business entities. The COVID-19 pandemic has impacted the tax practice in many ways. The crisis has created serious financial strains for all sectors of our communities and required that federal and state legislatures and administrative agencies respond much more rapidly than in the past. These responses have included modifications in the federal tax laws. The changes have been enacted without the traditional layers of advance notice and public hearings that are typically available to guide their interpre- tation. This has compelled tax lawyers to be nimble not only in understanding the basic provisions of the new tax rules, but also in identifying creative opportunities and hidden pitfalls presented by the tax law changes. Some of these changes have impacted tax rules that were modified only a few years ago. For example, the federal tax legislation enacted in March, commonly referred to as the “CARES Act,” restores the ability of businesses to carry back cer- tain net operating losses to prior tax years and permit such losses to offset 100% (instead of only 80% ) of taxable income in future years; these changes rolled back recent tax rules that had been enacted as part of the 2017 tax bill. Tax lawyers must be aware of the impact of these and other changes in the tax environment and recog- nize how they affect traditional planning structures. These legislative changes have been

coupled with the extension of many federal and state reporting and payment dates. However, in many cases, deadlines have not been uniformly modified, particularly for state and local taxes. Most of us are familiar with the deferral of the federal and Illinois 2019 tax return filing and tax payment deadlines to July 15, but unlike the IRS, Illinois kept the due date for the first 2020 estimated tax payment as April 15. Tax lawyers have been forced to quickly become familiar not only with the basic provisions of the myriad tax deadlines, but also to identify the potential inconsisten- cies and problems they present. These tasks have been made more chal- lenging by travel restrictions. Many indi- viduals have been required to curtail their travel commitments for their jobs, which will require adjustments to their traditional year-end tax reports. Others who normally consider themselves nonresident aliens for federal tax reporting purposes have been confined to the US during the quarantine and may face the prospect of being classi- fied as resident aliens and thereby subject to a host of US tax reporting and payment obligations. Tax attorneys will be called upon to guide these individuals to navigate the application and interpretation of cur- rent tax laws to their circumstances. Clients are encountering enormous economic pressures during the pandemic shutdown, and tax obligations can con- tribute to their stress. To be effective, tax lawyers must not only provide a clear and concise explanation of the tax law changes but must listen carefully to their clients’

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