Expert Guides Tax - ITR 2020

NORTH AMERICA Q&A
U N I T E D S TAT E S
Q&A with Steve Kimble
Chairman and CEO
Deloitte Tax LLP
What was the most significant development in your
region/jurisdiction’s tax practice in the past 18 months?
COVID-19 and the related legislative activity are the most significant
developments related to Deloitte’s US Tax business this year. Across
industries and sectors, companies are facing never-before experienced
challenges and business issues, such as significant revenue contractions,
staffing and supply chain inconsistencies and distressed debt
considerations. To lessen the impact of the downturn on individuals
and businesses, the United States Congress passed the massive taxand-spending
CARES Act package to provide economic relief to address
the impact of the COVID-19 pandemic. In addition to direct
cash payments for individual taxpayers and penalty-free, early access
to retirement savings, the legislation also includes several significant
business tax provisions, such as eliminating the taxable income limit
for certain net operating losses (NOL) and allowing businesses and
individuals to carry back NOLs arising in 2018, 2019, and 2020 to the
five prior tax years.
In April 2020, Deloitte Tax identified the business areas that were
most critical for our clients, which have been driving our focus for the
immediate term as we work through the COVID-19 outbreak and response.
These key areas are: transition to remote working; tax planning
for cash needs; employee retention credit/payroll tax deferral;
debt restructuring; and tax operating model considerations.
What was the most notable effect of that change?
The most notable effect of COVID-19 and the CARES Act remains to
be seen. However, as business situations change Deloitte will continue
to work closely with clients to carefully consider how the new law
could impact their business plans and performance.
With additional coronavirus stimulus spending on the horizon,
our professionals are helping financial executives and tax leaders understand
how their organizations might be impacted. Using our stateof-the-art
modelling tools, Deloitte Tax professionals are providing
robust scenario analyses and customized reporting for new and existing
tax provisions, and are working to develop recommendations and
action plans for various scenarios.
Where is the market moving in this practice area?
Deloitte is continuing to help clients navigate through the uncertainty
created by COVID-19 and the subsequent CARES Act. We see lots of
movement towards planning how potential scenarios could affect the
fundamentals of their business, reveal vulnerabilities, and even create
new opportunities, and our professionals are helping our clients stay
up-to-date and adaptable in the face of constantly changing conditions.
What kind of impact will this have on your work?
Deloitte is always in the practice of adapting our work to meet our
clients where they’re at. COVID-19 and corresponding legislation to
mitigate the worst economic impacts of the pandemic have only
heightened our focus on providing services and technology tools to
meet our clients’ evolving and unprecedented needs – and give them
the confidence to make informed decisions during uncertain times. At
Deloitte, we will use our expertise to help our clients navigate this
complex legislative landscape and provide innovative solutions and
meaningful insights that deliver real, lasting value.
Do you anticipate any significant legislative changes in the
future with a material impact on tax in your region?
The United States has seen the enactment of several major pieces of
legislation aimed at helping individuals and businesses cope with the
health and economic hardships of the coronavirus pandemic. On the
tax side, these new laws tend to focus on providing much needed liquidity
to businesses and individuals. As the year progresses, it is possible
we will see implementation of further efforts to use the tax code to
assist coronavirus mitigation, response, and recovery, though the extent
to which we will see bipartisan political cooperation continue is
uncertain. Historically, law-making slows dramatically as we get closer
to November’s quadrennial presidential election, though it is possible
the enormous challenges to individuals and businesses posed by the
pandemic create something of an exception to that precedent.
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