Leaderboard

I believe the intent of the Paycheck Protection Program was to enable business to continue to pay employees while revenue is down and/or stopped - to keep employees tied to the business (employed) so those businesses will have an easier time opening back up and carrying on. I think that's smart. I also think it's being abused. Honor System 101. I hope the people it's intended for get the grants. I do. It's better for all of us if the country gets back up and running as smoothly as possible. I have seen a few of my business owners really taking advantage here, one in particular has a business that is booming, and I am completely disgusted at him. I'm not sure if people don't understand what they're attesting to or understand completely and think it's great. Some of both types I think. Also, I agree that it was a huge mistake making unemployment income exceed the earnings it is supposed to replace. That one will cause a lot of unnecessary problems.

I disagree with the sentiment above. The company I work for is completely shut down except for accounting and Management (lucky me, only a 10% pay cut...so far). We furloughed 165 employees. Revenue is zero. But we still have to pay our leases for the building. We still have alarm systems, water bills, and the benefits for our employees. These obligations need to be paid. The owners have stopped taking draws, and are putting money into the company to keep it afloat. How are they supposed to pay their bills with no income from the company? And there are hundreds or thousands of "non-essential" companies like us who are in this same boat. If we stop paying our lease, how is the landlord going to pay their bills? While our employees are on UI, they are still not getting the enhanced amount. The Governor of CA threw 3 million people out of work, and was shocked when they all filed for unemployment? The CA EDD cannot keep up. The system requires that the employer verify the wages of the worker, but the businesses are shut down or working with less staff. A PPP loan would be awesome for us. We had great credit, until our revenues went to nothing. Who would loan to a company without revenue? And when this opens up, my projection for the company is at best break even for the year. Who is going to loan money to a company that is struggling? That is not how banking works. How are we going to get the funds for our planned expansion? We had projected to add over 100 jobs later this year when we built and opened our third facility, but that may not happen now, or may be delayed while we build back our profits and credit worthiness. Please tell the children of our hard working employees that they can't live the life their parents want to give them because they are "non-essential". Sorry if this is offensive, but there is a different side to this story. We cannot get a PPP loan, so our employees sit at home and our company withers on the vine. Not looking for sympathy, just explaining that there were good reasons for the PPP loan program. I just hope the scammers and leaches of the country don't get all the money instead of the companies who provide good jobs and benefits. JMHO. Tom Modesto, CA

All of the PPP loans with which I have knowledge are being applied for by entities that really don't need them. Many of them are from companies that are not even affected by the virus. They are being told that the loan is a reward for not laying off people, even though the people would not be laid off anyway. Seems like the $$$ is going to those who are creditworthy to begin with and have strong banking connections. "Creditworthy to begin with" implies they would scarcely be affected by 8 weeks of measurement. What is wrong with this picture??

cbslee and Tom, thanks for explaining.

I give the entire response a 10. And this part an 11.

Because the California EDD has not been able to update its computer systems to distribute the cash yet. CA UI is pretty much a hands off system in normal times. Employee gets laid off, files a claim online, the computer spits out a form to the employer who confirms the reason laid off and the wages earned. This normally happens during the 3 weeks it takes to get your first check. If the employer rejects the claim or the EDD thinks there is something fishy, they call the employee in for an interview and get hands on with the claim. Otherwise, it is a pretty automated process. Then 3 million claims came in over a 4 week period (10 times the normal volume). Add to that the self-employed who were never eligible before, and the number of employees at the EDD taking time off to homeschool their kids, and there is just a huge mess trying to get these payments out. The system was not updated to handle self-employed nor did they have time to update it for the extra cash from the CARES act. The Governor is not taking questions about it, the EDD is directing people to their websites because they can't handle the call volume, and no one knows for sure when the money will be distributed. Yesterday, the Governor outlawed protests at the state capital (for health reasons - much sarcasm intended by me). The constitution is only good for toilet paper in this state right now. Tom Modesto, CA

Anybody care to critique my answer to a Schedule C client who left me a long voice mail this morning? ===========• Hi Xxxx: I heard your voice mail. I am tied up all day and unable to return phone calls. I don’t know anything about what you described. That info will need to come from someone more familiar with the process. The only thing I’ve done is advise a couple of corporate clients on what to enter on their applications. The corporation questions are very precise so there’s no interpretation or guessing about what to enter. It sounds as though the sole proprietor information is specific to sole proprietorships and/or allows for some interpretation. I’m avoiding SBA loan applications for the simple reason I don’t know their special rules and lingo. But I do know they have the power to make life very unpleasant for accountants who offer advice about their procedures when they haven’t been trained. So I’m declining involvement in anything having to do with these loans. Lending really isn’t tax related anyhow. Sorry I can’t be of any help on this. ============ Yes, I’ll likely lose a client over this, but at this point in my life that isn’t a consideration.

I thought they were directly helping the people laid off by adding $600 a week to their unemployment from the federal government. What I don't understand, if everyone either has a job or can get unemployment (or is business as usual getting their retirement, government assistance, whatever) why are they not able to pay their rent? Or afford food? I understand some increase in need from small businesses who have no income coming in and are having difficulty proving their self-employment to draw unemployment since that has also been expanded to include them, but is it really that many people? Are they all working in the underground economy so that they can't show any earnings? Maybe someone should make a list and investigate them for back taxes after this is over.

Then he and the company are the same entity for tax purposes.

Tom, I agree with you, and it isn't offensive, it is the reality that nonessential businesses are facing. I am curious why your employees aren't getting the extra $600 a week though? I know that may not seem like much in states with higher cost of living like CA or NY and surrounding metro areas, but here I've heard from some laid off employees that are collecting more through unemployment than they were as paid employees, and I think there should have been a cap on that. Why should someone actually be making more from the shutdown being unemployed than when they were working?

Doesn't make a lot of sense to me either. Why not just directly help the people laid off? I think they're just shooting in the dark, trying whatever.

Me too. Tom Modesto, CA

In this case, though, the misinformation is at least partly the treasury department's fault. They at first said that people who don't normally have to file would have to file a simplified return to get their information in the system. Then they changed it to they would use SS/RR information to send the payments. So I understand the confusion people are experiencing.

Called my mom this weekend just to check in on how she is holding up. As we were talking, she mentioned that my sister-in-law was going to go to the website and see if she could set up my mom to get the stimulus money. WTH? I explained to her that people on SS would be getting it in a later round of funding and that they know who she is and since her SS check is DD, she did not need to do anything. The mis-information out there may be part of the reason the IRS site is clogged up. I wonder how many people on SS have gone out to the site and entered information to get their stimulus payment when they don't need to? Tom Modesto, CA

When people are sitting at home bored, these are the sorts of things that bounce into their heads and they obsess about. Have a client who has been ranting because he bounced a check to the IRS and they gave him a fee for $80. Guy makes about $130k per year in retirement and he has been obsessed the last 12 months about this $80 and how it is everyone's fault but his own. Thankfully he hasn't decided it is my fault also. Currently it bounces between the IRS, his own son, the bank, the financial advisor and the backoffice people because the advisor threw them under the bus for a while.

I think that is a regional issue. In CA, the maximum amount of UI you can get per week is $450. And the workers who we furloughed don't get that much, closer to $300 per week. With rent on a 2 bedroom apartment at about $1800 per month, you can see that regular UI is not going to cut it for our workers. The extra $600 will really get them close, but not above, their normal wages in our area. I bet it is much worse for people in the major cities trying to get by on UI only. Tom Modesto, CA

Wasn't taking issue with you per se. It seemed like the tone of the entire thread was "businesses don't need this money", when in fact they do. Maybe I am just sensitive right now, because I see a failure of government at every turn in this crisis. The PPP was a good idea that died on the floor of big government and greedy bankers. And the people who are really suffering are my friends and colleagues at our company. Makes me feel guilty that I am still working when they are not. Tom Modesto, CA

Only in trying to understand it all NOW. It's a big, complex program, with little gotchas and glitches scattered throughout. I am hoping that by next year's filing season they have the basic issues worked out. Until then, Magic 8-Ball keeps saying, "Answer hazy; Ask again later!"

In that case, they are not able to use the tool. Similarly, those who chose to have overpayments fully applied to next year's estimates and showed -0- refund are also not able to use the tool.

Sch C, choose nonresidential property in fixed assets. Just like our home offices are nonresidential property.

Should be a rule, all ABnB owners should live next door. Would reduce the party house issues. Locally, such rentals require a permit process and license (ToT gets properly reported and neighbors have a chance to object), so depending on your relationship with the client, maybe ask if they have complied with all government regulations.

If they had no tax liability and did not file 2018 or 2019 returns, they need to use the Nonfilers part of that app to file an EIP return to get in the system to be able to get an EIP. Once their EIP return is processed, then they can use the Get My Payment part of the app. Unless, they are a SS or RR or VA recipient, then they do NOT have to file an EIP return.

I would be inclined to agree that it is non-residential property because of the transient nature of the tenants. None of the tenants will be using it as a residence. It is closer to a hotel than an apartment building. That said, I have no idea why ATX doesn't want to let you use it as 39 year property.

It depends on the state, some states like MS and FL have very low unemployment benefits, so that in those states even with the extra $ 600 a week some employees may not be making more. For example I believe Florida's maximum weekly benefit is $ 275.

Employees in MD had no problem getting unemployment but self-employed are still waiting for the state to figure it out. The simple solution would just be direct payments to individuals from the feds monthly until things get back to normal.

I did a manual forms update. That worked. I have the form now.

And a little voice says something about tax avoidance transaction.

Sounds like there was constructive receipt. I don't think the fact the check was not cashed is going to change anything.

Yikes, you DO have a nice conundrum here - good luck! Last first: situs likely has nothing to do with where either of the trustees live; rather, the situs will be the state where the decedent lived and had the trust written up in. However, rules can vary between states so you'll likely need to check with both NY (generally nasty; that state wants tax on everything - I hear air is on the docket for next year [only half kidding]) and MO about their rules. It sounds like a complex trust, and certainly acts that way. "Terminate on distribution" is all well and good except for the long time between the triggering event and the resolution, so circumstances have forced it. I would think that you have an excellent case to make that the trust did *not* actually get "constructive receipt" in 2016, because it had no way to take possession of the funds (a piece of paper that was not legally negotiable is, to my mind, a block to constructive receipt). However, you should be ready to support that with the paper/email/whatever trail of no bank account, lawyers involved, trustee acting against interests of trust by refusing to allow the bank account, probable re-issuance of check (maybe multiple times) since those are usually only good for 90 to 180 days, etc. So what I would do (and this is without extensive - or really any - research) is prepare $0 returns for 2016, 17, 18, and the real receipt and distribution for 2019. If you are an NATP member, this might be a real good use of their "one research question free per year" service.

No payback if the stimulus check received is too high.

I refer everyone to the IRS FAQ's and to the article about the delay. If they are not satisfied with these, I suggest they call their US Congressperson and US Senator. They are the ones that write the laws. https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions https://www.msn.com/en-us/money/smallbusiness/stimulus-checks-and-other-coronavirus-relief-hindered-by-dated-technology-and-rocky-government-rollout/ar-BB12NSM3?ocid=msedgdhp

Good riddance! We've been swamped with all manner of calls and emails. Mostly about the loan/business stuff, but also about stimulus payments. Out-of-country (US citizen) clients too. ("Am I eligible?" Magic 8-Ball says "Answer hazy - ask again later" aka I dunno!) FORMER clients are calling. People wanting to know why they didn't get the payment for the new baby (born in Jan, not even on the not-yet-filed 2019 return). I've been sending them all to the IRS web page.

It has become the national obsession. Had a client call me, wanting to know what form he needed to fill out, to be sure he got the large amount. (Returns are filed, except 2019) He said, "We don't need the money, we are just going to put it in savings." I told him to check the IRS website. He then started ranting about why it is taking so long for his to come in. (His neighbor, a barber, had received his and he was almost demanding that I do something so he would get his. I also told him to call 800-829-1040 if he had questions, because I have no information, and cannot do anything for him to get that money "as quick as we can." I guess his bank had timeframes for putting money in his savings. He then tried to call me out, because he had not received his stimulus. I have one less client for 2019 taxes now.

...and both were from wealthier retired clients, whose income stream is secure, wanting to know why they didn't get the full 1,200 per filer. And both called twice. One wanted to know if he had to share it with his spouse, and the other wanted to me check the calculation to make sure it was right. I told him we wouldn't know if it was right until we filed his 2020 tax returns. <sigh>