Lion EA

Remember that these are just FAQs and not law. I've been suggesting to people to just wait a bit (don't cash or don't spend) for potential clarification. BofA called my biggest biz client early on to urge him to apply for a PPP loan. This client's biz is NOT touched by COVID-19 at all. He got the money. Forgiveness will be an issue (he'll fuss at me) because it looks like employee-shareholders do NOT get the healthcare and retirement matches added, only for non-shareholder employees. I'm hoping for clarification. And, hoping I do NOT have to be the messenger. One of my clients keeps writing me that she heard/the IRS says that she should get a stimulus check because she's on SS; when will her check come? She's on SS but also gets a NYC teacher's pension and a CT teacher's pension and still taught the first half of 2019, so she made way too much in 2019 (and even more in 2018) to get an EIP. I keep telling her. I copied her on some info from IRS.com, and it was ambiguous about SS recipients getting an EIP direct deposited. (I added a phrase before emailing her the copied text !!) I spend half of each day, sometimes more, communicating to clients, answering questions, and taking webinars. I enjoy the learning but want to prepare tax returns. But, all my clients are long-time clients and families/friends of clients, and I always take care of them to the best of my ability and knowledge. This year is stretching my knowledge far from just tax. And, the questions about unemployment !! I don't even know how to navigate the CT system for a SE or a partner, let alone NY and PA and.... I have no idea when their benefits will start or how much they'll get or whether the $600 will show up at the same time. I really want to return to answering TAX questions and preparing tax returns, but I foresee a bunch of Forgiveness Applications in my future plus more questions I can't answer. Let's start a pool re how many FAQs there will be re the Forgiveness Application. I guess 44.

It seems the interpretation is paid OR incurred. You can count the first paid payroll in your eight-week window, even if the workdays preceded the date your PPP funded, as long as the pay date is after funding. And, you can count workdays preceding your end date, as long as they are paid by the next regularly-scheduled pay date, even if after your end date. At least, that's what they were saying yesterday in a webinar. The webinar I'll attend Friday might give new clarifications!

Tell your client that shareholders who provide services to the S-corporation ARE employees and need to be on payroll.

Do any or all of the partnership operating agreements specify what method to use when a partner joins or leaves that partnership?

Five out of the last six returns I e-filed had the IND-162 message. Not all six. Nothing older than 3 May. All say Form: Code: IND-162 Taxing Authority: Federal Explanation: Thank you for using e-File. Dependent Information: /efile:Return/efile:ReturnHeader/efile:Filer/efile:PrimarySSN Solution: This is an informational alert issued by the IRS.

Me, too. When the postponement was announced, I started getting an extra hour of sleep and not working on Sundays. (Can't sprint long distances.) But, then the calls started coming in for information, advice, financials, and help finding things I didn't prepare, such as their payroll reports. That led to me taking a LOT of webinars to get up to speed on these non-tax credits/loans/etc. And, that information continues to change, be clarified, get reinterpreted, revised, as well as we just don't know yet. I'm not quite where I usually am 15 April. Still a small stack that were in-house when I started taking webinars and answering non-tax questions, questions and education that I would've postponed until after tax season. But, in our current upside-down world, those non-tax issues became more time-sensitive than tax returns. Longer tax season, but thank goodness a later deadline, because I'm not caught up yet.

If it's your own business, you set your own hours, closing date, criteria for accepting clients, etc. Why would it matter to you if a different preparer works until 15 July or 15 October or year-round or only until 15 April or doesn't open up until February each year or takes Fridays off or golfs every morning or anything else? You don't have to do any of those things. Or, you can do bookkeeping or sell insurance or sell securities or paint houses or vacation or babysit the grandkids or read or anything else to earn money &/or enjoy life. Even if you work for someone else, you can negotiate your needs or quit or find a different employer or go out on your own or retire. Keep Calm & Carry On in your own way!

Exactly, a Mnuchin quote and a couple of FAQs are not substantial authority and are likely to change, as we've seen all along. As you say, they're making it up as they go along. Wait. Our widow and widower clients need these payments. Don't rush to return them until we know more.

We don't have substantial authority yet. Tell your client to hold the payment/not spend it all and wait until you have further guidance for him.

Did she send a Form 1099-MISC for the service rendered?

Yes, 6 May saw a few new &/or revised FAQs, such as #10, #11 and #41 at https://www.irs.gov/coronavirus/economic-impact-payment-information-center

My short answer (or the final words in any longer answer) seem to be, "Ask your banker." I tell people (clients and non) that their banker/lender will interpret the SBA regulations re their specific loan. I remind people we do not expect SBA guidance until the middle of May. And, of how many, many times things have changed so far this year!

I also have attended more than one webinar that stated that WC is NOT a payroll cost for PPP. We won't know for sure until about 15 May. However, it will be that client's bank that interprets SBA's final definition of forgiveness for your client, so have your client work with his banker. No matter what, the incurred AND paid seems to be final. And 8/52 of annual seems to be a ratio applied to a lot of expenses.

I've been telling clients to wait for the next round of clarifications.

The phrase I've been seeing is "incurred and paid" and not "accrued." I think the prohibition is that you can't prepay expenses, can't prepay payroll. But, not sure I've heard. And, the last I did hear the SBA is expected to clarify forgiveness regulations about 15 May. Not a helpful date since companies have been receiving their loans already! Really hard to plan, hard to advise our clients.

Yes, filing 2018 or 2019, even if only an EIP 2019, gives the IRS the information they need to disburse an IEP payment. They have stated they will make payments through 31 December 2020. But, they haven't stated when they need taxpayer's information to get a payment out to them by year end. Remember, a taxpayer can still get their EIP credit or any remaining upward adjustment on their 2020 tax return in 2021.

It's not a part of my ProSystem fx. (Don't know about Axcess.) And, there may be other ways to package/buy it. I get the license free and pay a fee for verified signatures and a lesser fee for unverified signatures, invoiced monthly. I've only used it for verified. Because I wasn't using it for my NY commuters, I didn't have many I needed. As luck would have it, I'm working on a NY resident's return right now -- but, she's elderly and forgetful and has no computer/tablet/smart phone at all, so I won't be trying it out on her!

What does her will say? What does her state law say? Court appointed representative?

I also heard the "incurred and paid" in a webinar or two. I also heard suggestions to switch payroll to weekly for the 8 weeks of the measurement period. I think I heard that the SBA is releasing forgiveness guidance about 15 May -- which is well into the period for many borrowers. It's hurry up and wait. Hard to advise our clients.

Yep, CCH's eSign. I've been using it with ProSystem fx for a couple years now. NY, however, will not accept electronic signatures. They have generously said they will accept electronic signatures through this May due to the pandemic. I hope they continue.

If I were going to prepare an EIP return, I would do it on my own software and not on the IRS portal. I would probably charge for it. Especially if not a client, hadn't been a client, not a relative of a client. I have a couple of older clients who do not have to file, well would not need to file if they stopped withholding, but choose to file to start the SOL and just in case their income goes up and.... So we file to get their refunds. We talk about it each year, and they want to have some withholding, just in case. I charge them a small amount for preparing and e-filing their returns. We spend most of the time chatting and catching up. I think they want that more than they want to file a return!

Of course it impacts things if she was paid under the table. Hopefully, she documented all dates, amounts, etc., and is reporting the family to the IL DOL. Did she work for the family during 2019 and receive a W-2? And, she worked as an employee in her second job.

In some states, yes. Check the IL (or appropriate state) website.

Our government just borrows more from China.

The 24-year-old can get his stimulus credit on his 2020 return filed in 2021. Unless the IRS sends stimulus payments based on amended returns when they are finally processed.