Chamber Of Commerce Hits Mnuchin On Payroll Tax

From the US Chamber of Commerce’s letter to Mnuchin:

The U.S. Chamber of Commerce appreciates the Treasury Department’s work in response to the COVID-19 pandemic, particularly the quick promulgation of guidance to ensure relief is quickly distributed to American businesses, families, and workers. While the recently issued Executive Order (EO) on payroll tax deferral is well-intended to provide relief, it has raised serious concerns for both employers and employees.

This EO gives rise to significant questions about implementation. The Chamber appreciates recent reports that this EO will be optional but needs additional clarification about who elects this application. Further, there is uncertainty as to who is ultimately liable for the repayment of the deferred taxes, and when the repayment will be due and what mechanism will be used to collect that repayment.

As taxpayers delve further into this EO, questions arise about how to apply this in other situations, such as where employees have fluctuating salaries or receive bonuses; where employees are employed for a short term, such as with seasonal holiday workers; and where employees leave employment prior to the end of the deferral period.

The uncertainty raised by these issues, as well as myriad other issues not enumerated here, only exacerbates the challenges faced by payroll processors and compliance departments who are already struggling to implement this EO in an extremely short period of time.

The Chamber is famously conservative.