July 24, 2020 | Blog
Early PPP Forgiveness Application Process Still Vexes Companies – Eric Yauch, Tax Notes($). “As Congress considers extending and tweaking the Paycheck Protection Program (PPP), which provided loans that can be forgiven on a tax-free basis to businesses struggling during the coronavirus pandemic, companies that already took advantage of the program are waiting on the Small Business Administration and Treasury to deliver clarification on some of the finer points regarding forgiveness.”
Some of the confusion revolves around a certification by the company that it did not reduce annual salaries or wages of an employee by more than 25% during a specified period. Additionally, companies are also unable to achieve forgiveness if the number of full-time equivalent employees was reduced during the covered period.
Adam Sweet of Eide Bailly was quoted in the article:
“One of the new exceptions to the FTE forgiveness reduction refers to a borrower being unable to return to its pre-COVID-19 business activity during the period beginning on February 15 and ending on December 31 due to federal and state COVID-19 guidelines. Again, if a borrower is relying upon this exception, do they need to wait until December 31 to apply for forgiveness, even if they have generated enough eligible expenditures to qualify for full forgiveness before the end of their covered period?”
GOP Won’t Seek Payroll-Tax Cut in Coronavirus Relief Package – Andrew Restuccia, Andrew Duehren, and Kristin Peterson. WSJ($).
“In their bill, Republicans are expected to include an extension of enhanced jobless benefits, but at a lower level than the continuation of the current $600 a week that Democrats are seeking. The GOP package will also include another round of $1,200 stimulus checks to many American households. In a blow to President Trump, Senate Republicans won’t include the payroll-tax cut he sought amid opposition from lawmakers of both parties.”
The IRS Delivered Economic Impact Payments In Record Time, So Why Haven’t Some Needy Families Gotten Their Money? – Janet Holtzblatt, TaxVox. “Overall, the Internal Revenue Service did an impressive job distributing $267 billion to 159 million recipients in just over two months after the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. There were glitches, of course, and most were corrected rapidly. But the glitches don’t fully explain why four in ten adults, with income at or below the federal poverty level and between the ages 18 and 64, did not report receipt of payments by mid-to-late May. By comparison, 78 percent of other potentially eligible adults say that they did get payments by then.”
So, who got their money the fastest? According to the article those that met the following criteria:
Senate Passes Bill To Protect Stimulus Checks From Creditors – Kelley Phillips Erb, Forbes. “Earlier today, the Senate passed S. 3841 by unanimous consent. The bill, which was first introduced by Senators Chuck Grassley (R-IA), Sherrod Brown (D-OH), Ron Wyden (D-OR) and Tim Scott (R-SC) in May, is titled “A bill to protect 2020 recovery rebates for individuals from assignment or garnishment, and for other purposes.”
Unemployment Benefits, Stimulus Checks, And State And City Aid Needed As Economy Slows – Richard McGahey, Forbes. “New economic data show a growing slowdown, underscoring the need for another stimulus package. But intra-party fights among Republican Senators regarding deficit spending are slowing the legislation, and will make the overall bill smaller than it should be.”
New York and New Jersey Consider Financial Transaction Taxes - Jared Walczak and Janelle Cammenga, Tax Policy Blog. “Seeking new sources of funding, New York and New Jersey—two states at the heart of global financial markets—are considering financial transaction taxes. New Jersey’s A4402 would impose a 0.25 cent tax on every financial transaction processed in the state. In New York, some lawmakers have proposed a rate as high as 5 cents per share (1.25 cents for stocks worth less than $5). If either state succeeded, it would represent the only financial transaction tax (FTT) in the United States, although New York had its own FTT from 1905 to 1981.”
Phony Donations Yield Real Tax Evasion and Tax Fraud – Russ Fox, Taxable Talk. “Have I got a deal for you! You can give me a donation of, say, $500,000, and I’ll give you $450,000 back! Yet get a write-off on your tax return for all $500,000 but you really only spent $50,000. Isn’t that great?”
Bad tax preparers again make IRS' Dirty Dozen scam list – Kay Bell, Don’t Mess With Taxes.
“Among the worst of corrupt tax pros are the so-called ghost preparers. These unprincipled preparers regularly expose their clients to potentially serious filing mistakes. When these crooked preparers are done, their victims face not only the loss of the tax refund they were counting on, but also possible tax fraud charges."
This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.