3 minute read 25 Aug 2020
Fund managers team consultation

How companies are facing challenges for tax year 2019 and beyond

By EY Americas

Multidisciplinary professional services organization

3 minute read 25 Aug 2020

Current and future challenges companies are facing in light of the CARES Act and TCJA provisions.

Two questions to ask:

  • What challenges are organizations facing preparing 2019 tax year federal and state filings in light of continued implementation of TCJA and the CARES Act?
  • How are organizations planning for tax year 2020 and beyond?

The $2.2 trillion bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act included several provisions that have significant income tax implications affecting corporate taxpayers. In addition, there are still a number of considerations from the Tax Cuts and Jobs Acts (TCJA) that continue to impact tax year 2019. As a result, many companies need to focus not only on preparing for the 2019 federal, international and state filing season, but also on the implications for tax year 2020 and beyond. 

Survey results

During our July 22, 2020 webcast, we asked more than 1,600 executives what they considered to be the most significant pressure point in preparing tax year 2019 federal and state filings given continued implementation of TCJA and the impact of the CARES Act. Almost one-third (32%) indicated changes to international forms and federal TCJA implementation complexities as their most significant concerns, followed by resource limitations either due to COVID-19 or cost constraints (28%), as well as continued state TCJA implementation complexities (20%). 

ey-most-significant-pressure-point-in-preparing-your-tax-year-1

Next, we inquired if executives had filed or plan to file a refund claim under the CARES Act provisions. Again, one-third (33%) of respondents indicated they had filed a refund claim under the CARES Act while another 20% were still deciding and 47% indicated they would not be filing a refund claim.

ey-filed-a-refund-claim-under-the-cares-act-2

Half of respondents indicated their biggest state compliance challenge for tax year 2019 will be staying current on state legislative and regulatory changes, while another 23% noted modeling the state tax impacts of business and legislative change as their next biggest challenge.

ey-biggest-challenge-for-tax-year-3

We also asked respondents about their company’s current IRS posture. Almost 70% indicated they had been audited in the past one to three years or that they had recently received an IRS examination letter.

ey-current-irs-audit-posture-4

As executives look beyond tax year 2019, a large majority (49%) are concerned about incorporating pending and new regulations or legislation into their tax year 2020 planning.

ey-planning-for-tax-year-2020-5

Finally, almost two-thirds of executives indicated that they are either looking at improvements or investments in additional technology to create efficiencies and/or to aid remote working in the next year or will plan to assess any necessary changes in the coming year.

ey-changes-to-your-approach-to-tax-compliance-6

Webcast replay

For more information, watch the webcast replayUS corporate income tax compliance – preparing for the now, next and beyond.

Ernst & Young LLP contacts

contact Tiffani Pierson

contact Ellen Berger

contact Scott Mackay

contact Heather Maloy

contact Donna Siemaszko

contact James Adams

Summary

During a recent webcast, we asked more than 1,600 executives about the challenges they are facing entering tax year 2019 and beyond. These are the results.

About this article

By EY Americas

Multidisciplinary professional services organization