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Guess we need to send it back. IRS has updated Q and A on their website: https://www.irs.gov/coronavirus/economic-impact-payment-information-center Questions #10 and 41 deal with this

I tried sending it back using the instructions on the envelope to mark the box and drop it in a mailbox. I got it back again today.

Drake provides both Federal and State tax comparisons with each return processed. Most folks don't give much attention to tax rates. During the review of the tax return, I explain the tax rates but the looks I get suggest they are not all that interested. Usually its the folks who are investing and my larger rental clients that are concerned with tax rates and capital gain tax rates.

I have a customer who is on their 8 week clock, but cannot open. They hope to open during week 8. For them, paying a retention bonus makes sense for PPP forgiveness, as well as to entice some employees to get off the dole. It is a fine line as some want to stay on their 39 weeks of dole, as it is more income, but a rehire offer ends their UI eligibility. The employer is likely to "ask" who wants to work, with the retention bonus, rather than just rehire or quit option. Those who do not return will never be offered their position back. They are rehiring some now, and working them part time, with full time payment, doing things they can do while closed. -- EmployER paid retirement contributions are plainly countable as forgivable expenses. The dilemma is a moral one, as it is with any item you pay in your 8 week window which is not normal during that specific 8 weeks. If, for example, you would have paid into an SEP at some point during the year, and pay the same amount during the 8 weeks, that is just a timing issue, which many can live with (unknown about the bank auditor). If you start a new SEP plan, as a way to maximize, then it gets grey (at least). If you start an SEP or make an extra contribution, just to maximize, it may be harder to live with. If there is a deeper audit, by someone who gets payroll processing, then any out of cycle items could be flagged. Many employers will be altering their payroll cycle to weekly, with a payday on or about day 1. Many employers will be paying three months of health care expenses during their 8 weeks. Easy, and probably will not be questioned, as it is just a matter of paying the third item a little earlier than normal, such as the day the bill comes in instead of the due date. Watching out for easy to see prepayments will likely be needed. I suspect, but we cannot know yet, banks will have a set of audit guidelines. They will want actual tax type forms, check stubs/direct deposit records, and other actual documents, lease, retirement plans, etc. The bank has no incentive either way, as they are fully insulated (and paid well) as long as they perform good faith. I have been approached by a few people looking to back build payroll records, which I kindly decline (there are experts saying use some sort of payroll software, not hand done payroll). PPP forgiveness, can be easy, if one just pays as normal and does not worry about forgiveness maximization. Those that seek to optimize will work at it a little. Those that want to maximize will work at it a bunch, and take some risks. Likely, by judging carefully the bank's application process details, one can make a reasonable guess as to their forgiveness "details".

I just saw for 2020 we will have e-Signature capability. Sounds like this will be very helpful.

AICPA supports bill that would make PPP-funded expenses deductible By Alistair M. Nevius, J.D. "Legislation introduced in the Senate on Tuesday would overrule an IRS notice and clarify that ordinary expenses funded by Paycheck Protection Program (PPP) loans are deductible by taxpayers. The bill, the Small Business Expenses Protection Act of 2020, S. 3612, is currently in the Senate Finance Committee and is supported by the AICPA. The PPP was created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), P.L. 116-136. Under Section 1106(b) of the CARES Act, an eligible recipient of a covered loan can receive forgiveness of indebtedness on the loan in an amount equal to the sum of payments made for the following expenses during the eight-week covered period beginning on the covered loan’s origination date: (1) payroll costs; (2) any payment of interest on any covered mortgage obligation; (3) any payment on any covered rent obligation; and (4) any covered utility payment. Section 1106(i) excludes from gross income any amount forgiven under the PPP. The IRS last Thursday issued Notice 2020-32, which says that taxpayers receiving loans through the PPP are not permitted to deduct normally deductible expenses to the extent the expenses were reimbursed by a PPP loan that was then forgiven. The IRS notice reasoned that Sec. 265(a)(1) prohibits an otherwise allowable deduction under any provision of the Code, including Secs. 162 and 163, for the amount of any payment of an eligible Section 1106 expense to the extent of the resulting covered loan forgiveness (up to the aggregate amount forgiven) because that payment is allocable to tax-exempt income. If enacted, S. 3612 would overturn that position and allow taxpayers to deduct covered expenses paid or incurred by an eligible recipient of a PPP loan that is forgiven under Section 1106(b). On Tuesday, the AICPA sent a letter to Sens. Tom Carper, D-Del., John Cornyn, R-Texas, Charles Grassley, R-Iowa, Marco Rubio, R-Fla., and Ron Wyden, D-Ore., commending their efforts and supporting S. 3612."

So he can get paid for doing a return? Our services are not free...at least mine are not. Randall can choose to do things for free, but he did not cause the individual's issue, so why shouldn't he be paid for fixing it? Just my humble opinion. Tom Modesto, CA

I think the question 41 answer from TKTax's link is a better way. Put it in a separate envelope and mail to the address listed. Also mark the check VOID in the endorsement section and include a note for the reason for returning the check.

It works! The computer has nothing to do with it.

If she reported the cash income and filed a schedule c then she shouldn't have any problem

I agree but there is one situation that irks me. Ministers' housing allowance. The amount used to pay a mortgage is non-taxable and the amount paid for mortgage interest (and real estate tax) is also deductible. Sort of a double tax advantage for the same dollar. May not be as applicable now with the higher standard deductions but still annoying to me.

I too would have never thought anything different. I guess the key word is "common sense"

I thought this article presented a very balanced, reasonable perspective on the PPP loan and how to think & act regarding under-spending (less than full loan forgiveness if it appears likely). https://www.forbes.com/sites/tomhager/2020/04/21/you-need-to-change-your-thinking-paycheck-protection-program-ppp/#4bc590e197c0

Thank you guys for a multiple, laugh out load, morning!

Or, like the sign my younger daughter got me for my desk: "I can explain it to you, but I can't understand it for you."

John, that's pretty profound !

The link below is just hot off the press from the IRS. A lot of important information for answers regarding the employee retention credit and the PPP loan. https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

Sometimes it's hard for a person to understand something when they think their best interests may be served by not understanding it.

Yes! The first one that called me after consulting the They Said I Heard Tax Club with the question about whether their return (refund) would be affected 2020 - Oh, my soul. I don't even remember how he asked the question now, but wow, I tried way too hard to answer it. He finally said, "I don't understand," to which I replied, "I know you don't."

Yes, but it sounds like the devil is whispering in your ear!

Sometimes I fail to listen to those thought bubbles and these stupid calls take up way more of my day than they should.

Phone rings yesterday. I pick up. I know, don't ask me why, but I did. What can I say? I don't have caller ID, and sometimes it's google, and I can just slam it back down. Retiree Caller: You know that stimulus payment? Me: (Thought Bubble: Just yes or no, Rita, yes or no.) Yes. RC: Is it taxable? Me: (TB: Don't adlib, Rita, yes or no.) No. RC: Is the interest [income it will earn in the bank CD I'm putting it in] taxable? Me: (TB: WTH do you think?? Are you kidding me right now?? Yes or no, yes or no, yes or no...focus...) Yes. God is working in my life, y'all.