JohnH

Another one of those issues that arose from unclear and confusing info from SBA at the outset, leaving both applicants and (in some cases) lenders in the dark. I've encountered a few others.

So an interesting question arises. Were the tips included in the wages figure used to calculate the original PPP loan request?

I agree with Gail. If the PPP were simply a loan to the employer, there would be no basis for including employee tips. But the overarching purpose of the PPP (combined with the anticipated loan forgiveness), was an attempt to make employees whole without being too financially burdensome on the employer. And of course to keep them off the unemployment rolls, which somewhat reduced the total unemployment numbers and tried to avoid "windfall" claims. Although I'm not sure that last part was achieved.

No, there have been surprisingly few porn sites in the mix, as far as I can tell. Maybe more among the ones in foreign languages, but I wouldn't likely recognize them unless they're in Italian, Spanish, etc. But the mention makes me think of a friend who was presenting a power point to a group of executives a few years back. His email would pop up a message on the screen occasionally, but suddenly there were several Viagra and Cialis ads in a row. After 5 or 6 had popped up, he just turned to the group and said "I wonder how they know?".

I think I may have found the answer to what's going on. If you don't mind clicking on a link, here's the article I just now read: https://www.howtogeek.com/412316/how-email-bombing-uses-spam-to-hide-an-attack/ If you don't want to click on the link, I'll try to summarize what "email bombing" is all about. The attacker has likely gained access to one of my online accounts (especially one with stored payment info), and they want to try and order from that account. They're hoping that if I get a notification about a transaction I'll miss it, or even delete it along with a group of known booming emails, and the transaction will go through. They might make the effort at the outset in hopes that I'm overwhelmed, or they might try it after a little time has passed, in hopes that they will have exhausted me and I've given up. The article also suggests a few ways to mount a defense, but it's clear that this type of attack is difficult to deal with.

Reminds me of what the owner of a company I worked for used to say. "When we're brainstorming a problem this is a democracy. But when it's decision time it's a dictatorship."

I have myself listed as two other people with different email addresses in my contacts list. Those in turn forward to my primary email account. (I've been told that's a good way to get a heads up if someone hacks into your contact list.) Nothing like that has happened and nobody has told me they're getting unusual emails from me. So I don't think anyone has hacked into my account, although I did change my password just as a precaution. Since posting that question this morning I've shunted 30-40 emails from my inbox into Spam, and dumped about 400-500 out of Spam over the course of about 6 hours. The good thing is that the Inbox spam seems to be decreasing. It's just a matter of someone having tons of emails sent to me, but for what purpose? If I knew what they were up to I might figure out another way to thwart them, or at least what to be on guard for.

Thanks for the suggestions. I monitor my credit regularly, but will step up the intensity. I'll start paying attention to IP address on some of them. I've wondered if they are bombarding my inbox in hopes I'll accidentally open an attachment. Not all the emails have attachments but many do. But I never open an attachment unless it's expected.

In follow-up, this morning I deleted 1,400 messages that had accumulated in my Spam Inbox overnight.

For all you tech gurus out there, I have. question. Suddenly my inbox is getting bombarded with spam, thanking me for signing up for all sorts to newsletters and other sites. My spam filter catches many of them and sends them directly to my spam inbox, but a huge number are getting through to my regular inbox. Lots of them are also in foreign languages. I'd estimate I'm getting 100+ in my inbox daily, plus 300 - 500 in my spam inbox. I dutifully empty the spam inbox several times a day now. I also mark the ones in my inbox as "spam", and I think the volume in my inbox is decreasing slightly as a result. I changed my password just as a precaution, although this seems to be an "Incoming" problem as opposed to my email or contacts list being hacked. As expected, changing the password didn't affect anything new way or the other. Does anyone have any insight on what's happening here? Anything else I should be doing or should been the lookout for?

I did prepare a 2020 YTD statement through 3rd quarter today for a client, and it really looks wierd. These are not actual numbers, but similar. The client received a $200K PPP loan, which was spent appropriately. The conventional financial statement showed a $180k net loss. Then I added a line item entitled "Anticipated PPP Loan Forgiveness-Payroll" in the amount of $150k, a second line item entitled "Anticipated PPP Loan Forgiveness-Rent/Util" in the amount of $50k. Both these line items were negative entries under "Other Expenses". So the net income after Other Expenses is $20K. The client does seem to meet the requirement for loan forgiveness, but of course it hasn't happened yet. In any case, the lender can see both scenarios and make their lending decision accordingly. At least everything is disclosed, and I'm assuming the lender will understand. If not, guess I'll be doing some explaining shortly.

That hasn't been my experience. Sometimes they have reclassified, but it's hit and miss. I've seen similar situations with several clients over the years.

Even that calculation reaches a point of diminishing returns. I'm 72 and I just received a increase in my social security benefit due to my current income replacing a low-earning year somewhere in the distant/forgotten past. I estimate that I'll break even on the transaction (Social Security EE withholding plus ER matching which I also pay) sometime around age 95. But after that I'll be ahead by $300 per year or so, so there's that...

I have a couple of clients who occasionally enter the wrong quarter for their EFTPS deposits. I've been warning them since back in April that they had better be extra careful these days. If they make a mistake it might take a VERY long time to sort it out. The one who entered 3rd quarter 2020 back in March on a weekly payment is an example. They had to double up on the payment back when we filed the 1st quarter return and we are just now claiming the original deposit on their 941 due this month. Of course, there's always the possibility that someone at IRS caught it and reclassified it, but in the absence of a notice I've just assumed the deposit was sitting dormant for 6 months . Just glad it was a couple of thousand so it didn't cause a cash flow problem.

Thanks for all the perspectives. My particular focus was the frustration with the partial information that's floating around. People can read that the income is not considered taxable as debt forgiveness and then the article stops, or else if the article tells the whole story the client fails to read it all or "conveniently" forgets the other part. There isn't much to do other than tell them the whole story and then watch the puzzled expression on their face. Interesting turn this conversation has taken. Accounting for the PPP loan on the tax return might be challenging in several ways, depending upon what Congress does (if anything). What about preparing an interim financial statement? Say a client needs a Sept 30, 2020 financial statement for a lender. Do we need to reduce payroll/rent expense to reflect the anticipated loan forgiveness, add a line item at the bottom of the financial statement with a title such as "Anticipated PPP loan forgiveness", or just ignore the expected loan forgiveness since it hasn't yet been processed & approved? In the last scenario the financial statement can look pretty ugly, in the first scenario it can look too rosy, but in the middle scenario there is full disclosure. This might be considered the "Goldilocks" conundrum.

So has anyone had recent discussions with clients on the issue of taxes and PPP loan forgiveness? I've encountered two clients who had read in several places that when the PPP loan is converted to a grant, it is not treated as taxable forgiven debt. But they failed to read further and find that the IRS position is that the expenses paid with these same funds are not deductible. Even when we tell them about IRS Notice 2020-32, they aren't likely to read it. And unless Congress acts, they will wind up paying taxes on the forgiven debt anyhow. I've tried several approaches in explain this, but am still not satisfied with how clear I am being. And having to introduce the uncertainty based on whether Congress acts to clear this up just makes things even more confusing. (It's a much worse problem than trying to make a restaurant owner understand why they can't take a tax deduction for food they discard. ) I guess this falls into under the heading that "It's hard for a man to understand something if understanding it will cost him money." I sure hope Congress gets busy at some point (either pre-election or post-election), and provides some clarity on this important issue.

Ron: Here's what I've been pondering. Offered for critique or criticism. From an accounting standpoint, the funds are a loan from the bank, booked in the same manner as any other loan. So as long as that status remains, this is a loan payable on the books and the expenses are tax deductible. Forgiveness isn't guaranteed, so it's perfectly logical to retain it as a loan until forgiveness is certain. Now if a taxpayer requests & receives forgiveness in the same year and the bank relies on the SBA reimbursement to forgive the loan, then the offsetting entry would negate the expense as you have described. But if the taxpayer waits until Jan 2021 to request forgiveness, then the adjustment to income (or expense, as you see fit), would occur in 2021. Nothing is certain until the loan is actually forgiven. Depending upon the taxpayer's circumstances, it might be desirable to shift the income into 2021. (I could spin out a few scenarios where this would be applicable but that isn't relevant to this conversation) Now it's possible IRS may offer guidance on this before the end of the year. But it's a bit of an esoteric issue so they may not pay it much attention. In any event, this is my thinking right now given my understanding of the way this timing would impact a cash-basis taxpayer. It is somewhat similar to the tax treatment of a medical expense paid in 2020 and then reimbursed in 2021, at least in concept.

-> Subject: I'm being tormented to death by a few Sch C customers who want me to apply for loan forgiveness. In a couple cases, I didn't even assist with the application - it was done entirely by their bank. And now the bank doesn't want to file for forgiveness. <- Ron, when my clients ask me about applying for loan forgiveness at this stage, I just tell them it's too soon because SBA keeps moving the goal posts. I'll let them know when it's time. There are one or two who ask again, and I just tell them nothing has changed since our last conversation. I guess it all boils down to whether we run our practice or our clients run it. Besides, they've already received the money, derived the benefit, and the loan forgiveness is just an after-event formality. I've even wondered if it might be a good strategy for some cash-basis taxpayers to wait until after the end of 2020 to file for forgiveness, depending upon their business circumstances. (Still pondering this one)

The latest guidance from SBA, a FAQ sheet released on Monday Aug 3, helps clear up some (but not all), of the key questions which have been loitering in our minds these past few weeks. Here's a link, just in case you haven't seen it from another source and don't mind clicking on links. https://www.sba.gov/document/support-frequently-asked-questions-ppp-loan-forgiveness?utm_medium=email&utm_source=govdelivery

I appreciate all the well wishes. Feeling great now, continuing the weight loss (intentionally), and antibodies were very high on the first test. Already have my first appointment to donate Convalescent Plasma at the Red Cross on Aug 10. Will be able to donate every 28 days as I understand it. Maybe my antibodies will help someone else recover.

Most people who engage in this type of behavior on a grand scale can't resist bragging about it to their friends & associates. Somewhere in that crowd is often someone who isn't on board, who's worried about their own behavior, or who resent the fact that they weren't that "clever". So they retaliate by making a few phone calls to the relevant people. Or they hope to curry some favor so that their own issues might be overlooked. Anyone who's ever raised a teenager has probably seen this scenario play itself out in some way or another.

I always had allergy problems and/or bronchitis between Apr 15 and Aug 15. So the excuse on the 2688 was always "Due to recent tax preparer illness, additional time is respectfully requested to complete this return." That was my story and I'm sticking to it. Always got that magic "Approved" reply. (Remember how we had to file it in duplicate?" ) I agree with Lion, too. Extensions meant more money in my bank account because I could prepare more returns in 10 months than I could in 4. Plus I could live a more normal life in the first 4 and stop trying to be a tax martyr working until all hours of the night & sacrificing weekends.

Thanks for that info. What you described just illustrates how varied the outcomes can be, even among different age groups. I’m very interested in the antibody story as things move forward. I think there’s lots of speculation among the scientists based on something other than the data. I’m convinced it isn’t enough to know antibodies are present. The actual value need to be tracked, but they don’t have enough data to establish a baseline or relevant range yet. By the way, I lost 13 lbs which I needed to lose, but that isn’t an endorsement of the COVID diet.

Yes, that's a legitimate concern. Guess I'm going to be on high alert for any unusual symptoms anywhere in my body. I do happen to have a cardiologist appointment in 3 weeks. Going to lobby for a little more intensive testing. (I might even finally agree to that angiogram he keeps pushing.) But whatever the course in the future, it is what it is. I'm not losing any sleep over it. The thing I'm most curious about is whether there's any long-term immunity conferred, and whether it's limited. I'm gong to get weekly antibody tests, even if I have to pay, for at least the next 6-8 weeks. But plasma donations might come with free testing - haven't checked that out yet. If I wind up with immunity that would fit in with my plans to return to Myanmar and India on mission trips early next year, and frankly would have made it all worthwhile. I suspect those counties are going to be paying special attention to Americans at immigration - maybe even requiring documentation prior to departure.. (That's already happening in Europe)

Are you one of those who are saying "I don't know anyone who's had COVID-19."? Well, now you can change that statement. I thought I'd share with my friends and colleagues on this forum my experience of the past few weeks. We haven't shared this information beyond a few family members and close friends - haven't even shared it within our church (for some unique reasons) This is a little long, and probably too much detail. On June 26 I awoke with a deep cough, slightly sore throat, and low grade fever around 99.1. The next day the fever persisted and I began feeling very tired. Got tested on June 28. The next few days were pretty bad with fever bouncing around and peaking at 102. Dry cough, little or no taste, and general malaise. Didn't get my results back until July 4, but to no one's surprise I was indeed positive. The listless life and fevers continue until the night of the 11th, when I awoke at 3 am in a sweat because the fever broke. The next day I felt much better but then fever began to rise to 102 at bedtime, and broke again around 3 am. On the 13th day I felt great, and by day 14 one wouldn't have known I'd ever been sick. Today is day 19 and I'm still regaining strength, but feel wonderful. Already had my follow-up test and I'm now negative. Next steps will be voluntarily testing for antibodies and possibly donating plasma at the Red Cross if they want it. My wife also tested positive, but she NEVER HAD A SINGLE SYMPTOM. My doctor wasn't all that surprised and just said "Yeah, she's an asymptomatic carrier. We see this all the time." I'm 72, with stable angina, overweight, and I have "reactive airways", which means I get bronchitis easily. So I just assumed if I got the Wuhan Coronavirus I'd wind up in a hospital, probably on a ventilator, and with a poor prognosis. By the grace of God, I escaped all those dire outcomes. It was very unpleasant and a little scary, but all in all not much more stressful than a bad case of bronchitis. Medications? Mucinex and an occasional use of my Albuterol inhaler. Took one Tyleonol each of the two nights my fever hit 102. Other than that, I trusted my immune system and my body's built-in furnace to kill the virus. As my doctor reminded me, I'm one of the 99% who recover from this, so there's that perspective. But I also have the perspective of a cherished church member who died in a hospital on a ventilator. So what do I conclude from those two extremes? None of this is to minimize the risks of this illness, nor to predict the course of the illness if you or someone else happens to get it. And if that happens and you want to ask me any questions I'll be glad to provide even more detail. So I urge everyone to continue to be careful, take precautions, and know that it can happen, but it isn't an automatic death sentence.