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  • 02/25/2021 8:50 AM | Anonymous member (Administrator)

    February 24, 2021

    By Alistair M. Nevius, J.D.

    In a recent letter to Treasury and the IRS, the AICPA called for greater certainty for taxpayers and tax practitioners and for underpayment and late-payment penalty relief, both of which will provide greater assistance to those affected by the COVID-19 pandemic.

    In the letter, sent on Tuesday from Christopher Hesse, CPA, chair of the AICPA Tax Executive Committee, the AICPA urged Treasury and the IRS to announce any pending tax filing and payment deadline postponements by March 1. The AICPA also requested underpayment and late-payment penalty relief, a delay in collection activities, and an expansion of the temporary e-signature relief. The letter noted that many taxpayers and tax professionals continue to struggle to calculate and make tax payments and prepare and file tax returns.

    The IRS has said that taxpayers and tax professionals should assume that the April 15 deadline will not change, but it has also been reported that the IRS will not commit to keeping an April 15 filing deadline if Congress approves another round of economic impact payments.

    Specific AICPA recommendations include:

    • If Treasury and the IRS determine they cannot hold to the April 15 deadline, that decision should be announced by March 1 and the postponed date should be June 15.
    • Taxpayers should receive relief from underpayment penalties if they paid at least 70% of the tax due for the current year or paid 70% (90% if adjusted gross income (AGI) exceeds $150,000) of the amount of tax shown on their U.S. income tax return for the prior year.
    • Taxpayers should also receive relief from late-payment penalties if they timely request an extension of time to file their income tax return and pay at least 70% of the taxes owed with the request.
    • The IRS should halt compliance actions until it is prepared to devote the necessary resources for a proper and timely resolution of the matter.
    • The IRS should expand the existing temporary e-signature relief currently being provided to the millions of taxpayers affected by and working through the challenges created by the pandemic.

    — Alistair M. Nevius, J.D., ( is the JofA’s editor-in-chief, tax.

  • 02/22/2021 10:05 AM | Anonymous member (Administrator)

    Mon February 22, 2021

    By Katie Lobosco, CNN 

    (CNN)The Biden administration announced several changes Monday to the Paycheck Protection Program in an effort to reach minority-owned and very small businesses that may have previously missed out on accessing loans to help weather the coronavirus pandemic.

    Starting Wednesday, small businesses with fewer than 20 employees will have a two-week exclusive window to apply for the funding. Bigger businesses will be blocked during that time period.

    The administration will also change some eligibility rules, effective the first week in March. The self-employed, sole proprietors and independent contractors can now qualify for more money. They previously were excluded altogether or received as little as $1 because the loan amounts were calculated based on the number of employees.

    The loan program will also open up to small business owners with non-fraud related felonies, those delinquent on their federal student loans and some non-citizen residents, such as Green Card holders or those in the country on visas -- all of who were excluded earlier.

      "While the Paycheck Protection Program has delivered urgent relief to many businesses across the country, the initial round of PPP last year left too many minority-owned and mom and pop businesses out while larger, well connected businesses got funds quickly," said an administration official on a call with reporters Sunday.

      Initial hiccups

      Covid relief went to hair salons, restaurants, law firms -- and some members of Congress

      Congress created the forgivable loan program last March to help hard-hit small business owners who had to close their doors because of state and local pandemic lockdown measures. The first round of loans was slow to reach the smallest businesses and those without an existing relationship with a lender may have missed out.

      The first program closed in August, but lawmakers added funding in December and reopened the program so that owners could apply for a second loan. Congress targeted the new loans to those with fewer than 300 employees that have seen drops of at least 25% of their revenue during the first, second or third quarters of 2020. Lawmakers also carved out $12 billion for minority-owned businesses.

      Since the program reopened, about $134 billion has been lent to 1.8 million small business owners. About half of the funds allocated in December remain and will be available through March 31.

      More money on the table

      The Democratic-backed relief bill making its way through Congress would add $7 billion to the program and would make more non-profit organizations eligible.

      Another $175 million would be used for outreach and promotion, creating a Community Navigator Program to help target eligible businesses.

        The bill would also provide $15 billion to the Emergency Injury Disaster Loan program, which provides long-term, low-interest loans from the Small Business Administration. Severely impacted small businesses with fewer than 10 workers will be given priority for some of the money.

        It also provides $25 billion for a new grant program specifically for bars and restaurants. Eligible businesses may receive up to $10 million and can use the money for a variety of expenses, including payroll, mortgage and rent, utilities and food and beverages.

        Arlette Saenz and Nikki Carvajal contributed to this report.

      • 02/19/2021 9:00 AM | Anonymous member (Administrator)

        FEBRUARY 17, 2021 


        When I help settle an estate the most challenging task is mediating what is the “best” way to divide the jewelry, art, furniture and other tangible personal property of the deceased among their heirs. People behave irrationally when they feel that they were promised something under the will. They already feel that the item is theirs.  This is compounded by the friction between and among family members that existed during the decedent’s lifetime. 

        So, what is the best way to divide your assets? The fact is that there is no “best” way to divide assets, but there are some things you can do, or refrain from doing, to help avoid a family fight.

        First, do not tell someone that you will give them something in your will. If you want to give them something, give it to them today; otherwise, if you sell or give the item away to someone else, or even if it gets lost, the person you promised the item to will be disappointed. In the worst case, they may even be mad enough to sue the estate for the value of the item, especially when they have done work for you before your death with the expectation that they will get the item in return. I have had one client who promised a family necklace to a daughter who later forgot and gave it to a daughter-in-law. It was not so much that the mother had given the necklace away that hurt, it was that she had forgotten that she had promised it to her daughter. Fortunately, the daughter-in-law was gracious enough to give the necklace to her sister-in-law, and bad feelings where averted, but it could have been a very bad situation.

        Second, ask your heirs if they want it. Tastes change from generation to generation and things like formal china and silver sets for 28 is not something a 25-year-old single grandchild living in a studio apartment in LA is going to be able to take, even if they wanted it. Sometimes children and other heirs are very forthright in expressing their interest in certain things. Others may feel awkward about coming out and asking. My recommendation is to ask them what they would like. Sometimes they will surprise you with what they would like to have as a remembrance of you. Conversely, if you are gifting the item to another, or to charity, tell those who want it that they are not getting it and why. 

        Third, write out how you want to have things divided after your death, but keep it confidential.  If you have specific things you wish to go to specific people, write it down, and put it with your original will. Such a memorandum may not always be as binding as a trust, but it has great moral, and some legal force. You can also provide a method, or person, to break any stalemates. If there is no resolution, you can instruct that the items be sold. 

        Fourth, if you have artwork or collectibles, consider appointing someone who is knowledgeable about the items as a special personal representative to handle the division and possible sale of the collection. Your heirs probably do not have the same experience and knowledge you have about your collection, and too often heirs become overwhelmed by the sheer volume of stuff and end up selling, or giving away, very valuable items for a song. 

        Fifth, if you have things of local, social or historical interest, donate them to a local historical society. Many times, people keep the newsletters and other materials of the clubs and papers from their schools that are of not monetary value, but are not something that the local historical society or school alumni association has, and they value the item even if no one else does. I once had a client who came across a catalog of one of the first coin auctions held in Boston in the 1840s. It had notes as to who bought what, and for how much, written on the margins. According to an ephemera expert, it was not worth anything, but a local research library that had a collection of auction catalogs going back into the 19th century was delighted to get the piece.

        Finally, try to organize what you have. By this, I mean go through and inventory what you own as well as you can. Tell the history of the items, where you acquired it, with whom and why. Further, tell what items you consider good, which are better, and which are the best, and why.  Do not be afraid of getting some professional help. I have at times worked with local colleges to get help cataloging the papers of a writer or composer and allowing them to use the materials in their research. Getting access to this expertise is not always easy, but it is possible.

        There are a number of online services that provide a way to designate assets, though I have not tried any. I do feel, however, that these suggestions are relevant whether you use one of those services or not. These steps do not guarantee a conflict-free settlement of your estate, as there are some people who just want to have a fight, no matter what the excuse. In most cases, these suggestions, will help to minimize bad feelings all around.     

        Matthew Erskine is managing partner of Erskine & Erskine in Worcester, Mass., which provides legal and fiduciary services for unique assets.

      • 02/16/2021 9:08 AM | Anonymous member (Administrator)

        February 10, 2021

        By Cheryl Meyer

        Chad Davis, CPA (Canada), had been successfully working remotely for years when the coronavirus pandemic forced many accounting firms to go fully remote. He and Josh Zweig, CPA (Canada), founded LiveCA, a fully virtual accounting firm in Canada in 2013. Zweig was focused on tax and Davis on technology, so the two meshed well, especially since neither of them wanted to work from a brick-and-mortar office.

        “We spent two days in the woods, camped, and emerged with a handshake and a new company,” Davis said.

        Eight years later, LiveCA is thriving, employing about 80 people, and handling both Canadian and American clients. Adventurous Zweig, originally from Toronto, travels the world and works from various posts. Davis, from Nova Scotia, works full time from his large RV, which he shares with his wife, two children, and two dogs.

        In January 2021, Davis was sitting in his RV office in a beautiful part of Canada. “I’m in a campground on Vancouver Island in British Columbia and came here to isolate for the winter,” he said. Meanwhile, Zweig was caught in a lockdown in Argentina.

        Davis and Zweig have been at the forefront of a trend the pandemic accelerated.

        Only 4% of 223 CPA firms polled in the summer of 2020 said they were fully virtual heading into the pandemic, according to research by ConvergenceCoaching, a U.S. company offering training services to the public accounting profession. About three-fifths (61%) of the firms said they had some remote talent, and 27% said they had been strictly in-office pre-coronavirus.

        Once the pandemic ends, 81% of firms expected an increase or a significant increase in remote working among their employees, the survey said. Nearly one-third (30%) projected reducing their office footprint post-pandemic.

        The coronavirus has changed the business landscape significantly. Many accounting firm leaders, who were once reluctant to allow employees to work from home or other locations, now realize the value of a remote workforce, especially when it comes to recruiting and retaining talent. But working remotely can also create challenges, such as communicating with and managing employees, setting up necessary technology, and establishing and enforcing processes and policies for a virtual working environment.

        9 ways to make remote working successful

        What does it take for accountants to thrive when working virtually? Does it require changing interaction styles with clients or prospective employees?

        “Networking is about building relationships, and whether this is face-to-face or online, it’s about getting people to connect with you, and we do this through our personality, our behavior, and our communication,” said Sue Tonks, a UK-based leadership coach and entrepreneur, at the online 2020 AICPA & CIMA Women’s Global Leadership Summit in November.

        However, people only have three seconds to create an effective first impression when communicating with others online, Tonks said. “All people can see of you is a rectangular box,” she said about Zoom and other online platforms. “This is our stage.”

        Other challenges include feeling isolated, tired, or lonely; lacking motivation; dealing with distractions, often from children or barking dogs; and cohabitating with family, all day, every day.

        “The dynamic of being together 24/7 is a big shift for a lot of people and has caused a lot of struggles,” said Rohit Bhargava, founder of the Non-Obvious Company and author of seven books, including The Non-Obvious Guide to Virtual Meetings and Remote Work, published in 2020 (second edition coming in March 2021). Bhargava has shared his insights with organizations such as Microsoft, the World Bank, and JPMorgan Chase & Co.

        The future of work, he predicts, will be a hybrid of remote and in-office work, and thus it’s imperative that people know what it takes to flourish in a remote environment. Bhargava, Tonks, and Davis offered the following tips for prospering in a virtual world:

        Take up technology. “Embrace technology and learn how to be effective,” Bhargava said. When the pandemic started, he watched YouTube videos about lighting and setting up a professional home studio and soon after upped his video quality, which helped his business tremendously.

        Also, use video and invest in a good microphone and internet package, Davis said. “There’s nothing worse than slow internet or low-quality sound,” he said.

        It’s also important for organizations to set up policies that govern in-home technology setups. Davis suggests focusing first on tasks such as “password management, VPN usage, encryption, and what can and can’t be on your personal devices.” From there, move on to more firm-specific policies that address equipment ownership, internet speed requirements, and minimum-security practices. “Then move on to education and safe usage practices with every employee,” he said.

        Refine your routine. Don’t start your day reading email for hours, because your day can quickly unravel. “When you wake up, center yourself, do deep breathing, and think about what your priorities for the day are going to be,” Bhargava advised. If you still want to check email first thing during your morning cup of coffee, then cap it to an hour. “Literally set yourself an alarm,” he said. Then, move on.

        Be candid. Expect that noises — children, dogs, or the weed-whacking gardener — can occur when you’re working remotely, but be truthful about other things that could impact a video or phone chat. “If I had bad Wi-Fi, I will tell [clients] what I’m doing and not try to hide it, and normally it creates a more positive spin on the conversation,” Davis said.

        In addition, spell out your weaknesses to customers or others, which can naturally build trust. “That realism and truth helps speed up the relationship-building portion of an online relationship,” he noted.

        Be flexible and cognizant of communication styles. To build rapport, adapt your communication style to the person you are connecting to, Bhargava said. Determine which method garners the quickest response, and use that mode for that specific person. However, be cognizant that misinterpretation can occur if you send something off too quickly without much thought. “Be aware of the potential for misunderstanding in digital communications, and address them through a personal conversation instead of solely relying on email,” he advised.

        Davis’s firm has dealt with “communication sensitivity” for years, and this issue is a continual work in progress. “Sometimes communication issues can be avoided with more effective incentive structures and procedures that tend to be the source of communication breakdowns,” he said. “So, we’ve taken a more ‘root-cause’ approach to communication over the years.”

        Be punctual. LiveCA started using Zoom in 2015, and the cameras have always been on, Davis said. But building relationships virtually differs from doing so face to face. “Meetings start on time and end on time, and that has taught me to be a more functional communicator and to make sure we address the issues early and set expectations,” he noted.

        According to Davis, being a functional communicator “means that you’re more aware of the outcome that’s required for that meeting, and if you don’t get to address something, you effectively communicate the repercussions towards the end of the call to get back on track,” he said. “This is the opposite of intuitive communication that’s more free-flowing and may not get to a resolution within that scheduled time frame.

        “I’ve found working remotely emphasizes more respect for people’s time and, without the functional side of communication, it's really hard to replicate and delegate processes as you grow,” Davis added.

        Sparkle. Since you only have three seconds to make an impression online, make it count. “Just smile,” said Tonks in her presentation. “It’s warm, friendly, open, approachable.” Also, make eye contact as if you were face-to-face, pay attention to what others are saying, and don’t fidget, she said.

        Introduce yourself effectively. Tonks uses a technique, the “pause and effect,” which works especially well when you’re on a conference call with multiple people and want to be noted. State your first name, then pause, then state your first name again, and “then with effect and gusto and confidence, your surname,” she said. “So, my name is Sue [pause], Sue Tonks.”

        In addition, she stated, be specific when telling people what you do for a living. Don’t just say you’re a mergers-and-acquisitions consultant. Instead, she advised, say, “You know when major organizations want to buy out the other organizations? I help major international companies find the right partners, and as a result, they merge seamlessly.”

        Ask questions and follow up. When speaking with others online, ask questions. “Be visible. Don’t be invisible,” Tonks said. To stand out, she advised, take notes and mention people’s names on the chat. Say something like, “Oh, that was a really good point, Joe.”

        Also, realize your commonalities to kick off a conversation: You all live somewhere and have traveled; you’ve all been invited to an online event by the same person or organization; you’re all headed into the weekend or a holiday break; and you all have to deal with the weather, she said. And once you meet someone who can help your business or career, follow up. Ask if you can email them or connect on LinkedIn. “If you ask permission, you will never be a pest,” she noted.

        Be yourself. We’ve all been taught to act certain ways in professional environments, but the pandemic has changed the landscape, allowing people to be more individualistic in their approach to business communication and to work from almost any locale. The pandemic has had a life-altering effect on everyone, Davis said.

        “The things that make you unique will attract the right customers to you,” he said, adding, “embrace your homeschooling kids who barge into your call, pet the dog that wants attention, and don’t be afraid to sneak a quick snack. The pandemic has had a life-altering effect on everyone, and we’re all human at the end of day.”

        — Cheryl Meyer is a freelance writer based in California. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, a JofA senior editor, at

      • 02/11/2021 9:07 AM | Anonymous member (Administrator)

        February 10, 2021

        By Jeff Drew

        The U.S. Small Business Administration (SBA) announced changes Wednesday designed to reduce delays in the Paycheck Protection Program (PPP) approval process.

        Millions of small businesses have applied for PPP forgivable loans since it reopened Jan. 11 with $284 billion in fresh funding. A significant percentage of those applications has been held up by process and system issues stemming from additional validation checks put in place to flag potential fraudulent applicants.

        The AICPA sent a letter Feb. 3 urging the SBA to address the problems, which were causing the SBA’s E-Tran and PPP Loan Processing system to either reject or require more documentation for around 30% of PPP applications. Often the system didn’t allow lenders to submit the documentation or directly address other errors, such as data mismatches, that were preventing otherwise acceptable applications from being approved. The AICPA also called on the SBA to provide more frequent and clear communications to lenders and small businesses about the PPP issues.

        To address the concerns raised about the PPP process, the SBA said it would allow lenders to directly certify the eligibility of borrowers for first- and second-draw loans and would not require lenders to submit supporting documentation of borrowers with validation errors until they apply for loan forgiveness. The changes are designed to speed up the flow of funds to PPP applicants while “maintaining the integrity” of the program, according to the SBA.

        The SBA also said it would create additional communication channels with lenders, including an immediate call with national lenders to brief them on the PPP platform’s added capabilities.

        How much the SBA changes will smooth out the application process will be revealed as the platform tweaks are implemented with lenders. Accounting firms with small business clients whose applications are on hold may want to continue to preach patience as the SBA works to improve its platform and procedures.

        Despite the system and process issues, the SBA approved almost 1.3 million PPP loans totaling $101 billion from Jan. 11 through Feb. 7. The program is scheduled to continue accepting applications through March 31.

        AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register.

        The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

        Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA,, and fintech partner Biz2Credit.

        For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

        — Jeff Drew ( is a JofA senior editor.

      • 02/10/2021 10:05 AM | Anonymous member (Administrator)

        February 1, 2021

        By Susan C. Allen, CPA/CITP, CGMA

        The COVID-19 pandemic caused 2020 to shape up as one of the most difficult years ever for taxpayers and tax practitioners alike. Taxes and other financial matters have also been significantly complicated by new relief provisions, both for tax professionals to interpret and advise clients on and for the IRS to execute and enforce. Nationwide shutdowns and a historic volume of unopened IRS mail add to these complexities as the IRS's automatic notice stream continues to churn out notices and its services continue to be limited.

        These extenuating circumstances likely mean that practitioners will need to help more clients than usual with IRS penalty and collection issues. Here are some strategies and best practices that practitioners should keep in mind when requesting penalty abatement from the IRS on behalf of clients.


        It's important to understand and refer to the IRS's Internal Revenue Manual (IRM). This administrative handbook explains the procedures IRS employees should follow in the course of their work. Part 20 of the IRM discusses penalties and interest. Specifically, IRM Section (10/19/20), Criteria for Relief From Penalties, spells out the four categories of penalty relief:

        • Correction of IRS error;
        • Statutory and regulatory exceptions;
        • Administrative waivers (e.g., first-time penalty abatement); and
        • Reasonable cause.

        The underlying guidance for each category in the IRM gives practitioners the criteria they need to fight penalties effectively for their clients. And quoting IRS language (and providing the IRM citation) in a penalty abatement request can often help the IRS process the request more quickly and improve the taxpayer's odds for a successful penalty abatement.


        Though corrections of errors and statutory/regulatory exceptions are certainly viable options in certain circumstances, practitioners are likely finding their go-to penalty abatement defenses are either the first-time penalty abatement waiver (an administrative waiver) or reasonable cause.

        As a refresher, first-time penalty abatement is based on a clean compliance history and can be applied only against failure-to-file, failure-to-pay, and failure-to-deposit penalties. It does not apply to other types of penalties, such as the accuracy-related penalty. Essentially, it helps taxpayers who have an isolated, rare filing/payment compliance issue. But it is only available to use once every three years, meaning taxpayers should use it conservatively and weigh the dollar amount of the penalty carefully so as to potentially preserve this option. See the AICPA Tax Section's IRS First-Time Penalty Abatement page for more guidance.

        Reasonable cause is a facts-and-circumstances test where taxpayers spell out their situation and try to prove how they exercised ordinary business care and prudence. Many types of penalties allow for reasonable-cause defenses (and a reasonable-cause defense can be applied to multiple tax years/periods). The IRM describes categories of reasonable cause, several of which may be invoked for COVID-19—related issues and complications:

        • Death, serious illness, or unavoidable absence (IRM § For example, the taxpayer could have been sick or caring for a loved one with COVID-19.
        • Fire, casualty, natural disaster, or disturbance (IRM § COVID-19 was declared a natural disaster.
        • Unable to obtain records (IRM § Office closures and shutdowns may have prevented taxpayers from obtaining their records on time.
        • Erroneous advice or reliance (IRM § Tax legislation came out quickly, yet guidance sometimes lagged, making it hard to effectively advise clients.

        It's noteworthy that COVID-19's having been declared a natural disaster may help with proving reasonable cause. On March 13, 2020, President Donald Trump declared a nationwide emergency pursuant to Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 100-707, to avoid governors' having to request individual emergency declarations. All 50 states, the District of Columbia, and four territories have been approved for major disaster declarations to assist with additional needs related to COVID-19.

        Often, a compelling reasonable-cause defense may argue multiple categories in the IRM to showcase how the taxpayer's circumstances were complicated but the taxpayer nonetheless exercised ordinary business care and prudence.


        The IRS in November announced a new program, the Taxpayer Relief Initiative, to help taxpayers who are unable to pay their taxes because of the pandemic (News Release IR-2020-248). Taxpayers who can't pay their tax debt have always had options such as short-term extensions, installment agreements, and offers in compromise, but now they have more flexibility with these agreements. The initiative also highlights reasonable-cause and first-time penalty abatement options to help with penalties.

        Tip: For clients who need a payment arrangement, it's wise to wait until the tax is paid in full before requesting penalty abatement. The failure-to-pay penalty will continue to accrue until the tax is paid in full. Thus, to help clients get the entire penalty removed (and not just a piece of it), wait until the balance is paid off to request abatement of the full penalty.


        Remember that those who don't request penalty abatement won't receive it. Many penalty issues can be resolved fairly quickly over the phone with the IRS; other issues may require a straightforward letter to the IRS.

        And don't forget that the IRS's Independent Office of Appeals is always a viable option if the issue can't be resolved through normal channels. Appeals employees have more flexibility with penalty abatement, as they are instructed to apply the "hazards of litigation" standard. Also, for special circumstances that can't be resolved with the IRS, the Taxpayer Advocate Service is there to help (see "Tax Practice Corner: Enlist an Ally in TAS," JofA, Jan. 2021).

        As we navigate this unprecedented time, the AICPA continues to advocate for streamlined and improved penalty abatement procedures, and the IRS continues to work collaboratively with tax practitioners and taxpayers. Fortunately, the IRS has now expanded the avenues by which taxpayers may defend against or seek abatement of tax penalties. Tax practitioners who understand how to conduct their clients along these routes to obtain penalty waivers will be performing a much-appreciated service.

        Susan C. Allen, CPA/CITP, CGMA, is an AICPA senior manager—Tax Practice & Ethics. To comment on this article or to suggest an idea for another article, contact Paul Bonner, a JofA senior editor, at or 919-402-4434.

        AICPA member and Tax Section resources

      • 02/09/2021 8:59 AM | Anonymous member (Administrator)

        January 29, 2021

        Hosted by Neil Amato

        Paycheck Protection Program (PPP) loans and the start of tax season are two topics squarely on the minds of CPAs these days. This episode analyzes the Jan. 25 update by the U.S. Small Business Administration (SBA) about processing second-draw loan applications and looks at what recent IRS announcements mean for tax season. Kari Hipsak, CPA, CGMA, a senior manager at the Association of International Certified Professional Accountants, and Alistair Nevius, J.D., the JofA’s editor-in-chief, tax, are the guests for this quick look at recent news that affects the accounting profession.

        What you’ll learn from this episode:

        • Why PPP loan applicants should be patient and vigilant.
        • The practical applications of the SBA’s recent update.
        • A preview of the JofA’s February print issue.
        • What the announced date that the IRS begins accepting tax returns means for practitioners and filers.
        • Effects of the Consolidated Appropriations Act, 2021 (CAA), P.L. 116-260, on tax season.

        Play the episode below:

        Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA,, and fintech partner Biz2Credit.

        AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

        To comment on this episode or to suggest an idea for another episode, contact Neil Amato, an FM magazine senior editor, at

      • 02/04/2021 9:25 AM | Anonymous member (Administrator)

        February 4, 2021

        By Jeff Drew

        The AICPA sent a letter Wednesday urging the US Small Business Administration (SBA) to address problems small businesses are encountering when trying to apply for Paycheck Protection Program (PPP) forgivable loans.

        The letter, which is signed by AICPA President and CEO Barry Melancon, CPA, CGMA, refers to “a number of very significant operational changes to the PPP by the SBA which are not fully understood, as well as some process and system issues which need to be addressed in order to effectively provide critical relief to eligible organizations.”

        Some of the issues could be addressed by more communication from Treasury and the SBA, which oversee the PPP, the letter said. Other items will require SBA system and process improvements related to the E-Tran and PPP Loan Processing system, according to the letter.

        The letter addresses four areas of concern, as follows.

        Challenges with first- and second-draw PPP applications being denied acceptance in the SBA’s E-Tran system

        Additional validation checks put in place to counter potential fraudulent applicants are causing tens of thousands of legitimate applications to be denied acceptance by the SBA, the AICPA letter said, adding that “Lenders and loan applicants do not understand the process to resolve these declines, creating great anxiety and confusion for small business owners.”

        The letter describes some system/software issues that are causing declined applications, giving the example of many instances in which the small business owner is being incorrectly informed that they have a criminal record. Even after redoing this certification, borrowers may then still be declined on the same application due to another incorrect validation rule (for instance, an Applicant Tax ID issue).

        The AICPA requests that the SBA provide more information on the validation process and correct some of these system issues as an urgent priority. In addition, to reduce anxiety and confusion, small businesses would benefit greatly by being more clearly informed that their initial acceptance in the SBA E-Tran system could take more than a week via broad communications about the program. Because these validation checks are new, many applicants do not understand the potential change in the timeline for funding, particularly if their application encounters processing errors, the letter said.

        SBA processing and resolution delays for applications successfully submitted into the E-Tran system

        The SBA E-Tran system is flagging 20% to 30% of all first- and second-draw PPP applications for additional review based on validation checks, the AICPA letter said, noting that there are more than 40 different “error codes” related to these additional information requests.

        The letter outlines the following example: “One of the new requirements for second-draw sole proprietor applications is to use an EIN number instead of their SSN, even though many used their SSN with their original PPP application. This new requirement is causing the application to be declined, since one of the acceptance validation checks is to confirm the same number as the original PPP application. The overall top reason for decline is discrepancy with Applicant Tax ID, and the steps to correct this issue do not seem to be working in most cases. For instance, the system appears to report errors even in cases where the borrower used the same EIN on both applications and can demonstrate this fact to the lender.”

        The process for resolving the “error codes” is unclear and small business owners are being surprised by them, the letter said. The AICPA requests that the SBA provide further clarity and, even more importantly, communicate publicly that nearly one-third of all applications are receiving these requests for further review, which could delay processing by a week or more.

        SBA capping of first- and second-draw PPP loan amount

        SBA’s loan processing system has put in place a loan eligibility amount cap of $35,000 per employee for both first- and second-draw applications, the AICPA letter says, adding that the cap results in the SBA E-Tran system reducing the approved loan amounts. The AICPA asks the SBA to provide clear guidance related to these PPP loan caps because small businesses are confused when their loan amount is reduced with no explanation.

        Broad communication on available funding, overall processing and timing

        The letter recommends broader communication from the SBA confirming that there is sufficient funding to support all first- and second-draw PPP loan requests. The SBA also is urged to provide clear communication that processing time could be one to two weeks due to the increased validation checks and reviews.  

        Despite the system issues, the SBA approved nearly 900,000 loans totaling $72.7 billion from Jan. 11 through Jan. 31, leaving almost $212 billion available. Applications for PPP loans close March 31, 2021.

        AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held most weeks on Thursday at 3 p.m. ET, including on Feb. 4. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register.

        The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

        Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA,, and fintech partner Biz2Credit.

        For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

        — Jeff Drew ( is a JofA senior editor.

      • 01/20/2021 8:58 AM | Anonymous member (Administrator)

        January 20, 2021

        By Jeff Drew

        The US Small Business Administration (SBA) and Treasury on Tuesday published updated Paycheck Protection Program (PPP) loan forgiveness guidance and forms, including a one-page application for borrowers that received a PPP loan of $150,000 or less.

        That form, called the PPP Loan Forgiveness Application Form 3508S, can be used by borrowers that received a PPP loan of $150,000 or less. The form seeks information about the borrower’s loan amount, disbursement date, employee totals, covered period dates, amount of the loan spent on payroll, and the amount of the loan for which forgiveness is being sought. Borrowers are not required to submit any supporting documentation with the application but are mandated to maintain payroll, nonpayroll, and other documents that could be requested during an SBA loan review or audit.

        The SBA and Treasury released two other PPP loan forgiveness applications: Form 3508 and Form 3508EZ. Borrowers must submit payroll and nonpayroll documentation when applying for loan forgiveness with those forms, which provide lists of the required documents. In addition, the SBA and Treasury released Form 3508D, which certain individuals must use to disclose controlling interest in an entity applying for a PPP loans.

        Also released Tuesday night was an interim final rule (IFR) consolidating prior PPP loan forgiveness rules and incorporating changes made by The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260, which revived the PPP with $284 billion in fresh funding and created second-draw loans, which allow borrowers that received PPP loans during the first iteration of the program last year to seek a second loan of up to $2 million provided they meet tightened size requirements and can document a year-over-year revenue decrease of at least 25% for one reporting period in 2020.

        The IFR and all four of the forms released Tuesday night apply to first-draw or second-draw PPP loans.

        The relaunched PPP began accepting applications Jan. 11 from community financial institutions that loan primarily to underserved businesses. The application window opened Jan. 14 for lenders with $1 billion or less in assets and for all lenders on Tuesday.

        The SBA announced Tuesday that that it approved about 60,000 PPP loan applications submitted by nearly  3,000 lenders, for over $5 billion from the program’s re-opening through Jan. 17.

        AICPA experts will provide a summary of the latest PPP forms and guidance during an online Town Hall on Thursday at 3 p.m. ET. The event is free for AICPA members and $39.99 for nonmembers.

        Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA,, and fintech partner Biz2Credit.

        AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

        The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

        For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

        — Jeff Drew ( is a JofA senior editor.

      • 01/15/2021 8:37 AM | Anonymous member (Administrator)

        January 14, 2021

        By Jeff Drew

        The .cpa domain application window will open Friday for licensed CPAs to apply for on an individual basis, the AICPA announced.

        Beginning at 10 a.m. ET Friday, individual CPAs can request their preferred branding using .cpa, which is the restricted internet domain for the accounting profession. Thousands of licensed CPA firms and approved organizations, such as state CPA societies, submitted applications for .cpa domains from the program’s launch on Sept. 1 through 6 p.m. ET on Thursday.

        The AICPA was awarded ownership and management of .cpa in 2019 by the Internet Corporation for Assigned Names and Numbers., the AICPA’s business subsidiary, administers and manages the .cpa domain.

        Top-level domains are the handful of letters at the end of an email or website address, such as .com or .org. Use of a .cpa domain allows practitioners to strengthen their brand identity in online communications and provides better security and resistance to internet fraud schemes such as phishing and spoofing, the AICPA said. And because the domain is available only to licensed CPAs and licensed CPA firms, it promotes greater trust with clients and the general public.

        To learn more about .cpa or to apply for the new service, visit

        — Jeff Drew ( is a JofA senior editor.

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