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I'm following this because I have never, ever used either one. I do dread the day I might need it, too. I'm so ragged out all the time, my mug will scare my clients to death! And if I have been *coughing* that day, the only medicine that works for me is Tennessee Honey. And that only makes me look better in MY eyes!

I've looked at Pub 4557, a security plan from BrassTax.com, one from Drake, and others. For my SMLLC home office with no employees but with a professional IT person who specializes in tax preparer and lawyer offices, I found the Pub 4557 Safeguarding Taxpayer Data's "Use the Safeguards Rule Checklist" of four pages (14-17 out of 21 pages) as a good starting point. However, I have not done anything else besides checking off the appropriate boxes in that checklist -- and having an IT pro on retainer and following his instructions.

FIRE HIM ASAP. Your professionalism is worth much more that the freeloader.

The key here is proper allocation of the contributed goodwill. If that has been done then gain will properly flow from from the basis of partnership capital accounts upon sale/liquidation of the partnership, or sale of the contributed asset. There is no special tax rule for contributed goodwill, it is treated like any other 704(c) property which the amortization or depreciation is allocated to the partners under reg 1.704-3(b) in respect to a Built in Gain. The allocation is made to prevent disparity between the book and tax capital accounts of the non-contributing partner as well as to prevent shifting of tax attributes among partners. Basically, the contributing partner recognizes the built in gain over the remaining life of the asset through a reduction in the amount of amortization or depreciation allocated to him. Here is a basic example where A and B form a 50/50 partnership. A contributes goodwill with fmv of 10,000 and basis of 5,000 = BIG of 5,000. B contributes 10,000 in cash. The built in gain is reflected in the difference of A's book capital account of 10,000 and tax capital account of 5,000; while B has a 10,000 balance in both book and tax capital accounts. Now assume the contributed asset has 10 years remaining life. Therefore the book amortization is 1,000 and tax amortization is 500 for the partnership. The book amortization is allocated 50/50; therefore each partner receives 500 in book depreciation. However, under the reg, the tax amortization is allocated first to the non-contributing partner B in an amount equal to his book amortization of 500. Therefore in this case, B is allocated the entire 500 of tax amortization and A receives zero. Now look at the effect on A's capital accounts. His book capital account has been reduced from 10,000 to 9,500 by amortization while his tax account remains at 5,000 since he was not allocated any amortization for tax purposes. So now the amount of BIG reflected in the difference between A's book and tax capital account has been reduced to $4,500. If you fast forward the calculations to 5 years his BIG will be reduced in half to 2,500 and at the end of the ten year life of the asset, he will have recognized 100% of the BIG through his reduced allocation of amortization. While that was a simple example it can get a lot more complicated and additional rules kick in. For example there might be not be enough income to cover partner B's amortization; or there might not be enough tax amortization to cover B's book depreciation. Those situations are covered in the reg. Now in answer to your question, when the partnership is sold, any remaining BIG will be recognized by the contributing partner as a difference in book/tax capital accounts; provided amortization or depreciation has been properly allocated. If not you have "BIG" PROBLEMS to resolve. That is the correct answer!

I am surprised at guts of this pro bono client. Have this client call IRS directly & find out more details.

TerryD, tell the client to call the IRS himself! Give him the date the original was filed and the amendment, and tell him to ask why he is still getting bills. Then he can have it from the horse's mouth. More often than not, I have the clients call instead of me when it's not a complex notice because I do not have the time to wait on hold for half the day. I have a hunch, though, that maybe your client can't quite substantiate that extra deduction and fears it might be rejected. Why else would he be looking for an excuse to blame you? Warn him that IRS doesn't have to accept amendments, but you won't know if they do or don't until they process the return.

Copied from the SBA Website: Loan Forgiveness Payroll Costs FAQs 1. Question: Are payroll costs that were incurred during the Covered Period2 or the Alternative Payroll Covered Period3 but paid after the Covered Period or the Alternative Payroll Covered Period eligible for Loan Foregiveness? Answer: Yes, if the payroll costs are paid on or before the next regular payroll date after the Covered Period or Alternative Payroll Covered Period. Example: A borrower received its loan before June 5, 2020 and elects to use a 24-week Covered Period. The borrower’s Covered Period runs from Monday, April 20 through Sunday, October 4. The borrower has a biweekly payroll cycle, with a pay period ending on Sunday, October 4. However, the borrower will not make the corresponding payroll payment until the next regular payroll date of Friday, October 9. Under these circumstances, the borrower incurred payroll costs during the Covered Period and may seek loan forgiveness for the payroll costs paid on October 9 because the cost was incurred during the Covered Period and payment was made on the first regular payroll date after the Covered Period. 2. Question: Are payroll costs that were incurred before the Covered Period but paid during the Covered Period eligible for loan forgiveness? Answer: Yes. Example: A borrower received its loan before June 5, 2020 and elects to use a 24-week Covered Period. The borrower’s Covered Period runs from Monday, April 20 through Sunday, October 4. The borrower has a biweekly payroll cycle, with a payroll cycle ending on Saturday, April 18. The borrower will not make the corresponding payroll payment until Friday, April 24. While these payroll costs were not incurred during the Covered Period, they were paid during the Covered Period and are therefore eligible for loan forgiveness.

Now, I have been assuming that @Terry D actually DID provide that information to the client, at the time of the calls. Perhaps not in that specific detail, or in that detail but by phone instead of email. (I frequently email a client telling them that I spoke with the IRS today, and they said X, and leave off the agent's name and number.) It was the wanting copies of the specific notes to "prove" the contact and the recommendations that set off my warning bells. If someone just needs reassurance, that's one thing. But when they are asking me to "prove to them" that I contacted the IRS that's different. For the first, I'll refer them to the original email, or review my original call with them. I'll reiterate the backlog and maybe even send a link to a press release talking about letters going out in error. But as soon as a client wants me to put in writing something that "proves" I did something for them, my radar goes off like tin foil in a microwave.

We need to get together at Rita's farm (or is it a cemetery?) again. If TN EA Society has a seminar this summer, I can go back again. That was fun meeting you all. Tom Modesto, CA

Based on the online CPE classes that I took, your banks interpretation is correct. My largest client with a semimonthly payroll had a pay date which fell on the first day of their PPP allowable window. I specifically asked 2 different presenters whether these were allowable payroll expenses. Both presenters said the way the rules were written and are being interpreted that my clients paychecks dated the first day of their allowable expense window which was April 16th were definitely allowable payroll expenses along with the related state employment taxes.

I have used CCleaner for years, no complaints.