What to Know About Main Street Lending Program Updates – Paul Sirek, Eide Bailly. “The Main Street Lending Program is a relief program designed to support lending to small and mid-sized businesses impacted by COVID-19. Businesses are generally eligible for loans under the program if they have 15,000 or fewer employees or had 2019 revenues of $5 billion or less.”
The Federal Reserve announced revisions to the Main Street Lending Program designed to make financial support available to more small and mid-size businesses to help maintain operations and payroll. The most recent changes made by the Federal Reserve include:
The minimum loan size for certain loans was lowered to $250,000 from $500,000.
The loan term increased from four to five years.
Principal payments are delayed for two years (rather than the initial deferral period of one year).
The maximum loan sizes (which vary depending upon the loan facility used) have been increased.
The Federal Reserve’s participation is now 95% for all loan facilities (lenders retain 5% of the risk).
SBA IFR Modifies Original April 4 IFR, Clarifies that PPPFA Does Not Create a Cliff Test for Use of Loan Proceeds -Ed Zollars, Current Federal Tax Developments. “The SBA released the first PPP loan guidance to modify prior guidance due to the passage of the Paycheck Protection Program Flexibility Act (PPPFA) in a new interim final rule (IFR).[1] The new rule modifies the interim final rule originally published on April 2, 2020 to deal with certain provisions changed by the PPPFA.”
More Than 200 Groups Want NOL Carryback Change Reversed – Alexis Gravely, Tax Notes($). “The organizations wrote in a June 10 letter to Congress that provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P. L. 116-136) allowing businesses to carry back NOLs up to five years and eliminating the limitation on excess business losses were “costly tax hand-outs to wealthy business owners and corporations.”
The Long Arm of State Tax Law Threatens Telecommuters – Laura Saunders, WSJ($). “It’s known as the “convenience” rule. In a nutshell, it says that if a person has a job based in one state but lives and works in another state out of convenience rather than because the employer requires it, then that person owes income tax to the state where the job is based.”
Leave-based donation program available during pandemic – Sally P. Schreiber, J.D., Journal of Accountancy.
“The IRS on Thursday issued guidance on leave-based donation programs, permitting employers to make deductible monetary donations for relief of victims of the COVID-19 pandemic based on the value of sick, vacation, or personal leave that employees voluntarily forgo (Notice 2020-46). The donated amounts will not be treated as compensation to the employees, and employees will not be allowed to claim a charitable contribution deduction for the value of forgone leave.”
What’s Open (And What’s Not) As The IRS Resumes Operations – Kelly Phillips Erb, Forbes. “These re-openings include key processing centers, notice print facilities, and call center operations.”
Who Is IRS Aiming At In Recent Partnership Notice? Peter J Reilly, Forbes. “IRS efforts to tighten up partnership reporting may be making for some nasty surprises in the coming years, especially if IRS starts getting more enforcement resources. That’s what makes the recently released otherwise incomprehensible Notice 2020-43 of practical interest to regular people.”
IRS and tax software companies called out for Free File shortfalls – Kay Bell, Don’t Mess With Taxes. “Despite the appealing price, Free File has never attracted as many users as its creators had hoped. And according to a Senate subcommittee review issued June 9, it continues to struggle to serve eligible taxpayers.”
The Treasury Inspector General for Tax Administration has made several recommendations for promoting the free file program:
Develop and implement a comprehensive outreach and advertising plan to inform eligible taxpayers about the Free File Program and how to participate;
Ensure that management performs quality reviews of memorandum of understanding adherence testing conducted by Free File Program analysts on Free File Inc. members’ websites and software;
Clearly inform taxpayers of their rights and protections in the Free File Program;
And Develop a process for taxpayers to provide feedback or concerns on their experience using Free File.
Large Cryptocurrency Holdings Impede Installment Agreement – Nathan J. Richman, Tax Notes ($). “A couple hoping to pay off their tax debt with a six-year installment agreement can't ignore the IRS’s insistence that they instead pay immediately with their $7 million in cryptocurrency, according to the Tax Court.”
Learn more about cryptocurrency here.
Today in History:
On June 12, 1987, President Ronald Reagan told Mikhail Gorbachev to “tear down this wall”. President Reagan made this speech from the Brandenburg Gate in Berlin, and was of course referencing the Berlin wall.
The entire speech can be viewed here.
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