What happens if employees use intangible property outside the QOZ while working remotely because of Covid-19?

Answers

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  Matthew Rappaport

  Falcon Rappaport & Berkman

  August 30, 2020

  I don't think Notice 2020-39 addressed this issue, but it would probably be part of the "reasonable cause" argument you make to the IRS if they zero in on the fact pattern and cry foul. Reasonable cause is an equitable argument, and you can look at the IRS's criteria online (it's public if you Google it). Generally, if you can prove COVID-19 was a legit factor and that the intangible property was otherwise used in the OZ prior to COVID (or that it would have been used in the OZ but for COVID), then you ought to be in pretty good shape to avoid penalties if that's the only compliance blemish. But if they sense you're trying to game the system, I don't think it'll work out.

• 

  Maria De Los Angeles Rivera

  Kevane Grant Thornton

  September 14, 2020

  The IRS has not issued any relief for the tests that a QOZB must meet. Therefore, careful application of the tests must be done.

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