The American Rescue Plan Act established the Restaurant Revitalization Fund (RRF) to provide support to eligible entities that suffered revenue losses related to the COVID-19 pandemic. Specifically, the U.S. Small Business Administration (SBA) will provide restaurants and other eligible entities with funding equal to their COVID-19 pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Recipients of RRF are not required to repay the funding if funds are used for eligible purposes no later than
March 11, 2023. See the SBA website, here, for more information related to the RRF.
On July 13, 2021, the IRS issued a memorandum providing temporary guidance on levy actions involving RRF disbursements. The memorandum’s stated purpose is to “implement a temporary deviation that provides guidance as to the collection activities that modify the release of levy procedures in certain situations.”
Per the temporary guidance, when a taxpayer indicates that a levy attaches to RRF funds, IRS employees should request documentation to verify the date and amount of funds received. When the taxpayer provides sufficient documentation, prior to the receipt of the levy payment, the guidance indicates that IRS employees must release the levy on the RRF funds.
In some circumstances, the IRS might not release the levy. Particularly, if the IRS determines that “exigent circumstances” exist. An exigent circumstance involves the final loss of opportunity for the government to collect taxes due, such as the expiration of the statute of limitations, assets that taxpayers place beyond the reach of the government, etc. However, the memorandum notes that generally the taxpayer’s indication that they may file for bankruptcy is not an exigent circumstance.
This temporary guidance is effective 07/13/2021 through 12/31/2021.