Tax Update Blog

Tax News and Views Trusted Advisor Roundup

October 26, 2020 | Blog
By Daniel McNeil

Why You Need a Trusted Advisor to Help with Your PPP Loan Forgiveness – Adam Sweet, Eide Bailly. 

Many Paycheck Protection Program (PPP) borrowers are preparing to file applications that might result in forgiveness of all or a portion of their PPP loan. While some borrowers may be able to complete the application relatively quickly, other borrowers could face challenges, including: 

  • Voluminous documentation requirements.
  • Applications with complex calculations.
  • Interfacing with lenders.
  • The prospect of the government asking further questions (or conducting a review) before a PPP loan is forgiven.

maximize your PPP forgiveness today. 

Trump Offers Unlikely Explanation for Paying $750 in Income TaxesAlexis Gravely, Tax Notes($).“During the debate, Trump said the $750 figure quoted by the Times was a “filing fee” and reiterated that his tax liability was “millions and millions of dollars.” But the IRS doesn’t charge any fees for filing income taxes unless a taxpayer files after the deadline.”

 

IRS Releases Draft 1040 Instructions Adding Clarity To The Infamous Virtual Currency Question - Shehan Chandrasekera, Forbes. “On Oct 23, 2020, the IRS released instructions to the draft 2020 Form 1040 which contains the infamous virtual currency question ᠆᠆ At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in virtual currency? ᠆᠆ on the front page.”

According to the new instructions, taxpayers are not required to answer “yes” if they simply held cryptocurrency of transferred it between wallets.

“A transaction involving virtual currency does not include the holding of virtual currency in a wallet or account, or the transfer of virtual currency from one wallet or account you own or control to another that you own or control.”

IRS is resuming issuance of tax balance-due notices – Kay Bell, Don’t Mess With Taxes. “the IRS says it's made enough of a dent in the mail morass to account for timely mailed payments. So it's time to get back to the collecting part of its job.”

“The IRS will resume sending out 500 series notices that alert taxpayers they owe in late October, which is now, or early November.

The 500 series includes three notices that are issued at varying stages of nonpayment:

  • CP501 — This initial payment notice says the IRS is still waiting for your overdue tax money.
  • CP503 — This follow-up notice is sent when you don't respond to the first payment demand and warns that you may be subject to a lien if you don't pay.
  • CP504 — Things are getting more serious by the time you get this notice, which warns that levy action on any state income tax refund you might have is imminent.”
 

In the wake of disasters & COVID-19, will the IRS be ready for the 2021 tax season?Kay Bell, Don’t Mess With Taxes. “The continuing COVID-19 chaos, plus an extended 2020 filing season for those coping with this year's natural disaster onslaught, could create more challenges in 2021 for taxpayers and the Internal Revenue Service. Are we — and the agency — ready for it?”

IRS Tax Extension To Jan. 15 For California Wildfire Victims – Robert W. Wood, Forbes. “Victims of California wildfires that began Sept. 4 have until Jan. 15, 2021, to file various individual and business tax returns and make tax payments, the IRS announced.”

 

Energy Companies Continue Battling IRS on Tax Credit IssuesEmily Foster, Tax Notes($). “Blenders of fuel have been battling the IRS over the agency′s assertion that the section 6426 alcohol and biodiesel mixture credits offset the companies’ fuel excise tax liabilities, which means taxpayers must reduce their cost of goods sold or income deductions by the amount of those credits for applicable tax years.”


Stay informed!


This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.