The IRS could further extend the investment deadline for qualified opportunity fund investors because of the lasting effects of the coronavirus and recent protests, according to a Senate taxwriter.
In a video interview with Politico, Senate Finance Committee member Tim Scott, R-S.C., said he asked for the timeline for QOFs to be deployed to be “relaxed a little” in light of recent events. “The recommendation seems to be headed in a positive direction,” he said.
The IRS issued Notice 2020-23, 2020-18 IRB 1, in April to extend until July 15 several tax deadlines for individuals and businesses, including the one for investing a gain in a QOF. Investors normally have 180 days from the time they recognize an eligible gain to invest that gain in a QOF.
Scott, along with several other Finance Committee Republicans, sent a letter in early May to Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig asking for more relief for Opportunity Zone investors, including additional time to meet requirements set out by Treasury.
Scott, who played a key role in creating the Opportunity Zone program, said in the interview that he’d like to see the tax incentives used to attract some sectors and businesses back to the United States to produce equipment and medicines. “Maybe there’s a way to use Opportunity Zones to attract back some of the companies in the pharmaceutical industry,” he said.
Several Republicans, including House Ways and Means ranking member Kevin Brady of Texas, have suggested creating tax incentives to lure companies that create medicines and personal protective equipment back to the United States. Scott said that Opportunity Zone funding has reached $75 billion since the Tax Cuts and Jobs Act became law.
Scott also said he would like to see the Paycheck Protection Program (PPP) extended to 501(c)(6) organizations. “Getting those folks included would be wise because in many states they are necessary to prime the pump for economic activity in tourist states,” he said. Lawmakers like Brady have also said that an extension to provide PPP loans to 501(c)(6) organizations should be considered in the next relief bill.