Another Change to the PPP Loan
By: Article at a Glance: 48 changes to the Paycheck Protection Program (PPP) Loan provisions in the CARES Act. PPP Loan provision expired on June 30, 2020. SBA reported that the second round of funding resulted in an average loan size of $113,000. The Paycheck Protection Plan Extension Act. 3.7 million (85%) of loans approved by SBA are $150,000 or less. There have been 48 changes to the Paycheck Protection Program (PPP) Loan provision in the CARES Act. The changes included: The Paycheck Protection Program Flexibility Act, IRS FAQs, Interim Final Rules, Revised Interim Final Rules, and new application forms …
More Tax News from the IRS
Article at a Glance: Economic Impact Payment Notice. Early bird RMDs. COVID-19 IRA retirement plan withdrawals. Qualified Opportunity Fund investment delay. The IRS has been busy with lots of news items. Here are a few items of interest for you and your clients. Economic Impact Payment notice. Remind your clients to keep Notice 1444 — “Your Economic Impact Payment”. Your clients may not know this is an important document. They will need the Notice if they qualify for a larger Impact Payment when they file their 2020 tax return. The client may be entitled to a bit more rebate …
Tax News Galore
Article at a Glance:June 30, 2020 Deadline.20 million backlogged notices.Millions of unopened pieces of mail.IRS will pay interest on 2019 refunds issued after April 15. In the last week, the IRS has been busy with “news” for you and your clients: June 30, 2020 Deadline. Only a few days are left.There is still money left for a Paycheck Protection Program Loan, but the PPP loan program shuts down on June 30, 2020. It’s a rush, but maybe the struggling small business person can get funds to keep afloat for a few more months. If your client can’t make the June 30th deadline, …
PPP Loans Forgiveness — Applications, Clarifications, and Examples
Article at a Glance:PPP Loan Forgiveness Clarified in a Revised Interim Final RuleSafe Harbor Added for Reductions in FTEsMaturity Date of Loan ExtendedDeferral Period for Borrower Payments ExtendedEmployer Payroll Tax Deferral ExpandedPPP Loans Forgiveness — Applications, Clarifications, and Examples Forgiveness Applications Revised and Simplified SBA released a new EZ version of the forgiveness application (Form 3508EZ). The EZ application requires fewer calculations and less documentation and will ease the paperwork for small business owners and the practitioners that help them. The EZ can be used by borrowers who: Are self-employed and have no employees; OR Did not reduce the salaries …
Guest Post: A Quick Look at the Sections of the AICPA Auditing Standards Board Auditor’s Report
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. To read more about Rod or see his coursework, check here . In May 2019, the Auditing Standards Board (ASB) issued SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements. Over 2019 and 2020, the ASB issued SAS 135 – SAS 141 which all relate to the Auditor’s Report and are designed to go with SAS 134 as a suite of standards. The standards are …
Guest Post: Audit Risks and Audit Areas to Focus on Due to the Coronavirus
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. The Journal of Accountancy has published two articles that may help you prepare your audits for the effects of the coronavirus, on how the audit is performed. Highlights from these two articles are presented in this alert. 4 key COVID-19 audit risks for 2020 year ends, J of A, June 5, 2020 Four risk areas for auditors to consider as they prepare for their next audits of commercial entities: Internal …
Guest Post: How to Account for PPP Loans
By: Jeff Sailor, CPA
Have you taken a class from Jeff Sailor? He’s one of our favorites and one of the funniest. For more than 10 years, Jeff has served as an AICPA peer reviewer, focusing on small firms and sole practitioners. Jeff has managed his own accounting firm in Ocala, Florida, since 1984. During that time, he has also developed unique auditing approaches and auditing software. To read more about Jeff or see his coursework, check here. How to Account for PPP Loans As many of you have been working very diligently to assist your clients with both acquisitions as well as forgiveness of the …
PPP Loan Forgiveness Clarified — Again
It happened again. New law on Paycheck Protection Program forgiveness was signed by the President on June 5, 2020, and a correction showed up three days later. On June 8, 2020, Treasury Secretary Mnuchin and SBA Administrator Carranza issued a joint statement that clarified (or maybe corrected) a forgiveness provision in the Paycheck Protection Program Forgiveness Flexibility Act (HR 7010). 60% Spent on Payroll Clarified Earlier in the year, Treasury and SBA issued an interim final rule that required borrowers to spend at least 75% of the PPP loan proceeds on payroll. HR 7010 reduced the payroll spending requirement to …
Is Congress Entering Accounting & Auditing Territory?
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. During 2019 and 2020 Congress appears to have an increasing interest in accounting and auditing. The Current Expected Credit Loss accounting standard and the PCAOB have been the primary targets of Congressional actions. Let’s take a look at some of the bills and other actions. CECL In the Senate: “Continued Encouragement for Consumer Lending Act” and in the House: “CECL Consumer Impact and Study Bill of 2019” These bills were …
Payroll Protection Program Loan Forgiveness Changed
In a rare bipartisan effort with only one no vote by Rep. Chip Roy (R-Texas), Congress made changes to the Paycheck Protection Program (PPP) Loan Forgiveness. The Paycheck Protection Program Flexibility Act of 2020 (HR 7010) modifies several provisions of the Paycheck Protection Program (PPP) and amends the Small Business Act and the CARES Act related to: “Covered period” period for loans Payroll spending requirements Deferral of employer payroll taxes FTEs and salary reduction Loan payoff due date See the whole article here. Payroll Protection Program Loan Forgiveness Change Passed by Congress In a rare bipartisan effort with only one …
Guest Post: Rod Redding, Some Places to Look for Assistance in Accounting for the Coronavirus
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. This alert provides accounting websites, and a list of articles, that have been written about various issues related to the impact of the coronavirus on accounting issues. Of course, one of the key issues is going concern. A future alert will address this issue. The following articles are hyperlinked for your convenience. WEBSITES AICPA: Coronavirus (COVID-19) Resource Center AICPA: Coronavirus (COVID-19) audit and accounting resources A&A FAQs related to COVID-19 …
Guest Post: Divorces to Surge in Post-Pandemic Era
By: Danny Santucci, BA, JD, is a prolific author of tax and financial books and articles. In 1980, Danny established the law firm of Santucci, Potter, and Leanders in Irvine, California, and went into sole practice in 1995. His practice emphasizes business taxation, real estate law, and estate planning. Speaking to more than 100 groups nationally each year, he is known for spicing up his extensive expertise with an incredible sense of humor. Read Danny’s full Instructor bio or browse his CPE courses here. While the coronavirus emergency has produced many unexpected consequences, rising tensions amid quarantine, job loss, financial problems, …
Guest Post: PPP Interim Final Rule
By: SBA and Treasury Release Interim Final Rules on PPP Loan ForgivenessLate Friday evening, SBA and Treasury released “interim final rules” to further explain the Paycheck Protection Program (PPP) loan forgiveness process. Here are a few highlights from SBA-2020-0032 (26 pages) for borrowers and SBA-2020-0033 (19 pages) for lenders. Loan Forgiveness ProcessTo receive loan forgiveness, a borrower must complete and submit the Loan Forgiveness Application (SBA Form 3508) to the lender. The lender will review the application and make a decision regarding loan forgiveness. The lender has 60 days from receipt of the completed application to issue a decision to SBA. If …
Guest Post: FASB Extends Effective Dates for Revenue Recognition and Leases
By: Jeff Sailor, CPA
Have you taken a class from Jeff Sailor? He’s one of our favorites and one of the funniest. For more than 10 years, Jeff has served as an AICPA peer reviewer, focusing on small firms and sole practitioners. Jeff has managed his own accounting firm in Ocala, Florida, since 1984. During that time, he has also developed unique auditing approaches and auditing software. To read more about Jeff or see his coursework, check here. FASB Extends Effective Dates for Revenue Recognition and Leases At their board meeting on Wednesday, May 20, the FASB decided to extend the effective dates for the …
PPP Loan Forgiveness Application Released by the SBA
Forty-two days after the first Paycheck Protection Program (PPP) Loan Applications were accepted, the SBA released the PPP Loan Forgiveness Application. SBA Form 3508 includes 2 pages of instructions, Schedule A and its worksheet for computations, and 7 pages of application. That’s 11 pages and it’s just the start as SBA has yet to release FAQs or “interim final rules” to provide friendlier and more complete details for the forgiveness application. According to the SBA, the form and instructions include several measures to “reduce compliance burdens and simplify the process for borrowers” including: Options for borrowers to calculate payroll costs …
Coronavirus Tax News Update
IRS and the Small Business Administration have been working on the details that go along with the implementation of the CARES Act — albeit slowly. Here are three pieces of news from IRS and SBA IRS Released a Draft of a Revised Form 941 That Includes a Page of New Lines for COVID-19 Related Payroll Credits The IRS released a draft of a revised Form 941. The revised form includes 23 new data entries to accommodate three COVID-19 related payroll tax credits. The revised form reports the amount of payroll taxes that were retained by the employer in anticipation of …
Guest Post: Relief for Audit Reporting
By: Jeff Sailor, CPA
One of Western CPE’s most popular instructors, Jeff Sailor brings expertise and a singular flair to his coursework, designed to combat “boring CPE.” With 30 years accounting experience and more than 10 as an AICPA peer reviewer, he’s as knowledgeable as he is thoughtful about his presentation. Read more about Jeff in our Instructor Spotlight and check out his CPE here. On May 1, 2020 the Auditing Standards Board issued SAS 141, which made official the decisions made at their April 20th meeting. This update extends the effective date for audit standards 134-140, which were all to be effective for periods ending after …
IRS Say PPP Loan Forgiveness Makes Expenses Not Deductible
As we struggled through the Paycheck Protection Program (PPP) loan applications this last month, something didn’t make sense in the way that the loan forgiveness worked. The recurring question we came up with was “How are expenses treated if they are paid with tax-free money?” We asked and the IRS answered. In Notice 2020-32, the IRS says that no deduction is allowed for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a PPP loan. A recipient of a PPP loan can receive forgiveness of indebtedness on the loan in an amount equal …
Employer Payroll Tax Delay Can Help Cash-Strapped Businesses
The employer’s share of Social Security Tax (but not Medicare tax) can be delayed, and paid over two years. Many business clients may not know that the deferral applies to:Self-employed individualsRecipients of PPP loans, but only until the date of PPP loan forgivenessThe President is about to sign legislation to provide more funding to the PPP loans and SBA’s EIDL. Once we see the details, watch for an eTax Alert in your mailbox.EMPLOYER PAYROLL TAX DELAYEmployers must withhold social security taxes on employee wages. Self-employed individuals are subject to self-employment tax. Under CARES, taxpayers are allowed to defer paying the …
Guest Post: Current Expected Credit Losses (CECL) and the Virus
By: Jeff Sailor, CPA
One of Western CPE’s most popular instructors, Jeff Sailor brings expertise and a singular flair to his coursework, designed to combat “boring CPE.” With 30 years accounting experience and more than 10 as an AICPA peer reviewer, he’s as knowledgeable as he is thoughtful about his presentation.Read more about Jeff in our Instructor Spotlight and check out his CPE here.When I got up this morning and read my local newspaper, I was a little surprised by a prominent article I found. Please understand that in my paper, most of the articles usually begin with “Florida Man…” and end with something dumb that someone …