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  • 05/20/2021 3:27 PM | Anonymous member (Administrator)

    May 19, 2021

    By Jeff Drew

    The Restaurant Revitalization Fund (RRF) will officially stop accepting applications Monday, May 24, at 8 p.m. ET, the U.S. Small Business Administration (SBA) announced.

    While the application window won’t close until Monday, it realistically remains open only to the smallest providers of on-site food and drink. The SBA revealed last week that the RRF had received applications seeking more than twice the $28.6 billion allocated by Congress to fund grants to restaurants, bars, and other eligible businesses hard-hit during the COVID-19 pandemic.

    In a news release Tuesday night, the SBA said that the RRF program has received more than 303,000 applications, requesting a total of nearly $70 billion, but that more than $220 million remained available from $500 million set aside for eating establishments that posted 2019 annual revenue of no more than $50,000.

    Food and beverage providers that meet $50,000 revenue standard are encouraged to apply through SBA-recognized point-of-sale vendors or directly via the SBA online application portal, the agency said.

    Congress created the RRF to provide food and beverage providers with grants equal to their pandemic-related revenue loss, up to $10 million per business and no more than $5 million per physical location. The funds can be used for eligible expenses, such as payroll and rent.

    The vast majority of RRF funds appear destined for eligible businesses owned by women, veterans, and socially and economically disadvantaged individuals. The American Rescue Plan Act, P.L. 117-2, which created the RRF, mandated that those businesses receive priority review for the first 21 days of the program, which opened May 3.

    During the first two weeks of the program, the SBA received applications from more than:

    • 122,000 women business owners.
    • 14,000 veteran business owners.
    • 71,000 economically and socially disadvantaged individuals.

    Those groups represent 57% of the RRF applications received by the SBA and the vast majority of the $6 billion in grants approved by the SBA for 38,000 applications.

    AICPA members can access a detailed summary of the RRF.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held every other week. The webcasts, which provide CPE credit, are free to AICPA members and $39 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register. Recordings of Town Hall events are available to view for free on AICPA TV.

    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.

  • 05/12/2021 1:35 PM | Anonymous member (Administrator)

    May 10, 2021

    Deetra B. Watson CPA, CGMA

    We’ve seen historic levels of federal funding in response to the COVID-19 pandemic. Legislation such as the CARES Act and the recent American Rescue Plan Act of 2021 (ARPA) provided billions of dollars to American businesses, state and local governments and not-for-profits. While this funding has been a huge relief, especially for nonprofits, it causes complications for a lot of recipients.

    When a non-federal entity expends $750,000 or more of federal awards in a fiscal year, a single audit is required. While not all CARES Act recipients need a single audit and we don’t know the single audit ramifications of ARPA, here is a nonauthoritative list of the new programsthat require single audits. Plus, many existing federal programs received significant new funding that will be subject to single audit.

    Many COVID relief fund recipients have never had a single audit before and may not know all the requirements associated with this type of funding. Your existing clients may need a single audit for the first time. You may begin working with new clients who have never had a financial statement audit before. Here are a few tips for how you can help your clients through the single audit process.

    Ask clients what funding they’ve received.

    At my firm, we’re asking all our clients what type of funding they’ve received in the past year. In some cases, we’ve asked to see a copy of their grant agreements so we can help them identify what’s needed on their end, and then on our end as the auditor. Additionally, we send emails to clients with news related to the funding they’ve received. We also update our website with the most current information. The sooner our clients know about important and relevant information, the better prepared they are and the better audit we can perform — so it’s a win-win.

    Encourage your clients to be proactive and ask any questions about funding they’ve received. For example, the controller at one of my clients, the North Carolina Aquarium Society, let me know once she learned her organization would receive relief funding. She knew this funding had stipulations but didn’t know yet that a single audit would be required. She found out about the single audit early in the process. But so many other organizations were unaware of all the requirements until after they had already received these funds.

    Communicate openly with your clients.

    This is a time when you need to have heightened communication with your clients. My firm has found that our clients have a lot of different interpretations of the funding guidelines. As an auditor, you should clarify that your clients truly understand the guidelines for the type of funding they received and make sure they have procedures in place to comply.

    Some of the COVID funding programs, such as the Paycheck Protection Program, do not require a single audit. But clients need to know — even if they’re under the $750,000 threshold — that there are still administrative requirements even if a single audit is not needed. For instance, the funds may be restricted for certain purposes, so make sure your clients fully understand the guidelines for the funds they have received.

    Be aware of audit quality concerns.

    Some first-time single audit clients may be concerned with costs. They’re required to get an additional audit, which will require more work and will cost more than other audits they may have received in the past. Some clients may worry about spending too much on the audit. But, in this situation, they need to make sure they’re getting the highest-quality audit possible.

    As auditors, we have a duty to the public to perform high-quality audits. The public relies on trusted audited information to ensure their tax dollars are spent appropriately. Because of this, audit quality should always be at the forefront on every auditor’s mind.

    Because of the complexity of single audits and the specialized knowledge needed on the rules and compliance requirements, if you are an auditor who doesn’t perform them, you should Consider whether you should even accept a single audit engagement. You can still perform the financial statement audit, but other options for the single audit might be to refer your clients to someone else in your organization with the appropriate experience or to another firm that specializes in single audits. Alternatively, if you have some experience but not much, you could consider engaging another firm to perform a pre-issuance review or other types of consultative assistance to help ensure a high-quality audit. You can use the AICPA’s Peer Reviewer Search tool to find an auditor to refer your clients to or to look for consultative assistance. Additionally, the GAQC has a listing of its member firms with contact information on its Find A Member page.

    If you choose to take on a single audit, there is learning available to help you gain the fundamental knowledge you need.

    Make time for continuing education.

    Lifelong learning is a large part of the accounting profession. My firm has always been big on training and CPE, so we’re making sure that all of our staff gets the required training for their specialization areas. (For instance, as generally accepted government auditing standards (GAGAS) require, auditors who perform single audits must maintain their competency through CPE hours and topics listed in the 2018 Yellow Book.)

    Regarding the new funding in the past year, we pay close attention to any sort of training that federal agencies provide. Additionally, the information we get from AICPA’s GAQC, in particular its COVID-19 Resource page, has been great. I’d also suggest talking to other firms on what resources they may have regarding single audits and COVID relief funds. It’s useful to speak to your peers about what they’re doing and learn from their experiences.

    The pandemic has drastically changed work in many industries, and the accounting profession is no different. My firm has performed more single audits this year, and this is likely happening at other public accounting firms across the country.

    Keeping up with all these changes while continuously striving to be that trusted adviser for your clients is tough. In these times, it’s especially important to be mindful of staff well-being. Organizations need to provide support to the staff to help them remain engaged and avoid burnout. Focusing on well-being can enable staff to do their jobs better, which allows them to better serve their clients and, ultimately, contributes to enhancing audit quality.

  • 05/10/2021 8:52 AM | Anonymous member (Administrator)

    May 6, 2021

    By Ken Tysiac

    Thomas Sneeringer, CPA, likes to say that major program determination within a single audit engagement requires strict adherence to the Uniform Guidance rules and formulas even when they don’t seem to make perfect sense.

    For instance, as auditors scrutinize the pandemic-related aid that organizations have received, it might seem that all this new funding, regardless of amounts expended, should be audited as major programs.

    Sneeringer said that’s not necessarily the case, especially for the smaller programs.

    “I hate to say this about the process, but auditors can get into trouble when they try to use common sense,” he said. “It’s really about being true to the formula, being true to the guidance, and let that walk you until you reach the conclusions.”

    Sneeringer is a partner at RSM US LLP in Gaithersburg, Md., who will serve as a co-presenter for a single audit session at the AICPA & CIMA Not-for-Profit Industry Conference, which is scheduled for June 7–9 online. The conference will include a number of sessions devoted to providing useful information on single audits, and Sneeringer is presenting a case study that will serve as a discussion guide for many important techniques and considerations that practitioners need to use.

    Critical to the correct determination of major programs in a single audit is getting a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) from the client.

    The SEFA for Sneeringer’s presentation (simplified for purposes of illustration) contains the following federal programs and amounts for a Dec. 31, 2020, fiscal-year-end client:

    Federal programs and amounts

    Despite the existence of new coronavirus relief money from the HIV Emergency Project Grants and CRF programs, according to the guidance in the 2020 Office of Management and Budget (OMB) Compliance Supplement and related Addendum, the determination of major programs does not change for the single audit of this client.

    “A lot of auditors think, ‘There’s CARES Act money. Of course it’s high-risk. We’re going to have to audit it.’ Not necessarily,” Sneeringer said. “There’s still a process, a series of required steps we go through, given this mix of awards and knowing what’s been audited in the past and what hasn’t been audited.”

    When total federal expenditures are less than $25 million, a Type A program is one with expenditures of $750,000 or more; the others are Type B programs. A Type A program that has not been audited in the past two audits is considered high-risk and would be considered a major program to be audited.

    A Type A program also is high-risk if in the last audit period it was identified with a material weakness, had a modified opinion, or had known or likely questioned costs of more than 5% of the federal expenditures for that program.

    In the example, the CRF program is brand-new funding that has never been audited before, and at $800,000, it is a Type A program because its expenditures exceed the $750,000 threshold.

    “So we know this is going to be a major program,” Sneeringer said. “It’s a Type A program, never been audited before, 100%, take it to the bank.”

    The Research and Development Cluster is a Type A program as a whole, and the Nursing Research is considered part of that Type A program for single audit purposes even though its funding on its own is just $300,000.

    The Violence Against Women program, meanwhile, is a Type A program because its expenditures are $1 million. In the example, the audit of the program last year found a significant deficiency in its internal controls.

    Despite that, the program still isn’t guaranteed to be high-risk because a material weakness, not a significant deficiency, is the threshold for high risk.

    “A significant deficiency doesn’t get you automatic high risk, you still have to look at the other required steps for risk determination in the Uniform Guidance,” Sneeringer said.

    The HIV Emergency Project Grants expenditures are just $650,000. So, even though it’s new, it’s a Type B program and doesn’t automatically need to be audited. Instead, the Uniform Guidance has the auditor use a formula to identify how many high-risk Type B programs need to be audited (based on the number of low-risk Type A programs) and then the auditor goes through a risk assessment process to determine which high-risk Type B program will be tested as a major program. That determination depends on several factors defined in the Uniform Guidance as well as auditor judgment.

    These are just a few of the nuances related to single audits. Sneeringer said they’re difficult to learn, especially when an auditor performs just a small number of these audits in a year. He encourages those practitioners to be extremely careful on these engagements, or to refer them to an auditor with more experience on single audits.

    “I’ve been doing it for 30-plus years now, and I’m still learning new things, and I have a heavy concentration of doing these engagements in my client deck,” he said. “And I’m still learning. If you are doing one, two, maybe five or less during the year, with the nuances you can make a wrong turn and, before you know it, you have a substandard audit.”

    He encourages those who do perform these audits to adhere to a few basic steps:

    • Do your homework. “You need a thorough understanding of the steps involved,” he said.
    • Spend sufficient time planning the audit. “If you properly plan, then you likely have a much better outcome than if you didn’t plan at all or didn’t properly plan,” he said.
    • Follow the Uniform Guidance, even if it seems counterintuitive. “Work your way through the formula, and don’t make presumptions,” he said.

    It’s also important to remember that things related to single audits are constantly changing and evolving because of the pandemic. There have been several new rounds of pandemic funding in the last several months, and there has been discussion that OMB may temporarily revise the major program selection rules to ensure that certain pandemic funding be selected for audit as major programs. However, it is uncertain at this time whether that will occur.

    Auditors should be alert to any potential changes to the process for their 2021 audits. To stay up to date, follow the activity of the AICPA Governmental Audit Quality Center.

    — Ken Tysiac ( is the JofA’s editorial director.

  • 05/06/2021 9:02 AM | Anonymous member (Administrator)

    May 5, 2021

    By Jeff Drew

    The U.S. Small Business Administration (SBA) has stopped accepting new Paycheck Protection Program (PPP) applications from most lenders almost a full month before the $292 billion program’s application deadline.

    The SBA informed lenders Tuesday afternoon that the PPP general fund was out of money and that the only remaining funds available for new applications are $8 billion set aside for community financial institutions (CFIs), which typically work with businesses in underserved communities. The agency also has set aside $6 billion for PPP applications still in review status or needing more information due to error codes.

    This and other PPP issues will be addressed during an AICPA Town Hall at 3 p.m. ET on Thursday.

    Congress in late March extended the PPP application deadline two months to May 31, in part to give the SBA and lenders time to resolve error codes that were holding up nearly 200,000 applications in the SBA’s PPP platform. The unresolved error codes were related to validation checks instituted by the SBA to help prevent fraudulent applications from being funded.

    The PPP Extension Act of 2021, P.L. 117-6, did not include any additional funding for the current round of the PPP, which Congress provided with more than $290 billion to make forgivable loans to small businesses and not-for-profits suffering economic loss related to the COVID-19 pandemic.

    The SBA reported Monday that it had approved more than 5.6 million PPP loans totaling more than $258 billion from the program’s reopening on Jan. 11 through May 2. First-draw PPP loans accounted for $57.3 billion, and second-draw loans totaled nearly $201 billion.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held every other week. 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. Recordings of Town Hall events are available to view for free on AICPA TV.

    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.

  • 04/22/2021 9:21 AM | Anonymous member (Administrator)

    April 1, 2021

    By Cheri H. Freeh, CPA, CGMA, Quakertown, Pa.

    Editor: Valrie Chambers, CPA, Ph.D.

    On March 13, 2020, life as everyone knew it in the United States came to a grinding halt as the president declared a national emergency concerning COVID-19. At first there was a great deal of conflicting information regarding whether accounting firms were permitted to remain open, whether remote working was permitted, if a total shutdown was required, what government services were available, and whether sufficient resources would even be available to continue working if it was permitted. The entire country was in a state of confusion, and accounting firms were no less affected than everyone else.

    Many large regional and national accounting firms were better equipped to handle the situation due to their previous investments in technology and their movements toward becoming paperless offices. Unfortunately, a significant number of small, local CPA firms or sole proprietor CPAs with one or two employees simply were not ready to jump into the paperless and/or remote-working world.

    Initially, the first step for these small firms was to ask the following questions:

    Are we permitted to work?: This may seem like an odd question, but it was not completely evident at the beginning. For example, in Pennsylvania, the initial order from Gov. Tom Wolf required accounting firms to cease all operations. It was determined a day later that accounting firms were considered essential and were permitted to open their offices or work remotely. In a survey conducted by Arizent, Accounting Today's parent company, larger accounting firms were far more likely to have closed offices or locations, while only 11% of firms with fewer than 50 staff members reported closing their offices (Hood, "Despite Productivity Drops, Firms Commit to Remote Work in Reopening," Accounting Today (July 7, 2020), available at

    How can we complete our work and keep everyone safe?With the importance of limiting contact, it became necessary to work remotely. Many small firms had to scramble to set up secure methods for their staff to work from home. Since many of the clients of these small firms are not technologically savvy, working with client-provided paper documents was also necessary. To accommodate the needs of staff to pick up and drop off records and use copiers and scanners at the office, it became critical to limit the number of staff members who could access the office at any one time. Initially, there were so many unknowns that concerns arose regarding the safety of handling client documents. To ensure staff safety, many small offices were closed to the public; dropboxes were used to accept client records; records were received by mail; and once received, records were quarantined for a period in a location with ultraviolet light systems or other disinfecting treatments.

    How can we meet the needs of our employees?: Besides the need to access client records and office equipment, employees needed ways to perform their work while, in many cases, educating their children at home and/or caring for other family members. There were also psychological concerns to consider. Staff members had different comfort levels, and employers had to be sensitive. In many cases generational differences determined the importance of various concerns.

    How can we meet the needs of our clients?As mentioned previously, a large portion of the clientele of small firms do not have the ability to scan and upload documents and may not even have a computer, let alone a printer. This presents challenges to any firm, no matter how advanced the technology is at the firm level. The general public was scared. As Congress worked to address economic concerns, accountants worked to keep their clients aware of the various new stimulus, loan, and grant programs arising to address their economic needs. It became very common that the small firm practitioner was not only a tax preparer but also a source of comfort and advice to his or her clients.

    How can we make sure client records are safe and secure?Above all, security of client records is crucial. Detailed documentation of the location of all client files and records was necessary. A master file of the location of all client documents was absolutely necessary. Staff training was also necessary to ensure that all staff handled client documents and files in a safe and secure manner.

    Besides dealing with all these issues, accountants also had to learn about Paycheck Protection Program loans, Economic Injury Disaster Loans, stimulus payments, and unemployment benefits to assist their clients. Small firms do not have the benefit of dedicated research and training departments to provide information to staff members. As a result, additional time was necessary to track down information to pass on to clients.

    What to carry into the future

    After enduring all the questions, stresses, unknowns, and challenges presented by the pandemic, what lessons have small firms learned that can be taken into the future?

    Technology is critical to facing the future. Small firms need to be ready for remote-working conditions when necessary, and this means working with a qualified IT professional to ensure secure connectivity. Remote working may be required due to many circumstances other than a pandemic; for example, snowstorms, natural disasters, civil unrest, child care issues, or even having to be home to meet an appliance repair technician. When the proper technology is in place, staff members can be productive at times when they would not have been in the past.

    Small firms can become more competitive in hiring talent if they are able to offer full or partial remote-work options. Work/life balance is highly important, and the ability to avoid the time and stress of commuting can be a big selling point for a firm.

    Electronic remote meetings can be huge time-savers. It has been said that one of the most common phrases uttered during 2020 was, "I think you're on mute." While electronic remote meetings get a bit old after several months, with no end in sight, they do have their merits and, when used sporadically, can save travel time and costs.

    All firms, large and small, should evaluate the office space necessary to operate their businesses. With increased remote working, the need for dedicated office space for each employee will correspondingly decrease. Some firms are moving to a "hotel" model for providing staff offices. Staff members are not provided their own offices and, instead, reserve an office if they choose to come into the firm office for a day or a period of time to meet a client.

    Communication and training with both staff and clients help to create efficiencies. The pandemic has, at times, been scary and confusing and has created uncertainty and insecurities. Clear communication helps shape expectations and can be used to reduce uncertainty and fear.

    The AICPA has multiple resources available on its website to assist small firms in meeting various needs (visit These resources can save precious time and help firms provide top-notch services to clients.

    The pandemic has been challenging, yet small CPA firms across the country have navigated through and survived the storm and have learned to prepare for the worst but still hope for the best. Experience is the best teacher, and many lessons have been learned through this experience. As someone once said to me (in a remote meeting), "You shouldn't let a good pandemic go to waste."

  • 04/09/2021 8:27 AM | Anonymous member (Administrator)

    April 8, 2021


    The situation regarding the May 17 bifurcated filing and payment due date with IRS keeping the 1st quarter estimated payment at April 15 is extremely fluid. There is also uncertainty regarding filing an extension for gift tax returns due April 15. Unfortunately, there are no clear answers. Our recommendations as of the time of this statement are as follows:

    • In order to ensure that the 1st quarter 2021 estimate is credited to April 15, the taxpayerwill need to pay the estimate on a Form 1040-ES or make an online payment directed to2021 on or before April 15.
    • To file an extension for a gift tax return (Form 709), Form 4868 or Form 8892 should befiled on or before April 15.

    Statement and suggestions

    The situation regarding the May 17 bifurcated filing and payment due date with IRS keeping the 1st quarter estimated payment at April 15 is extremely fluid as AICPA releases this statement and suggestions. There are significant efforts underway on Capitol Hill where (1) a bill has been drafted in the House that would change the 2021 1st quarter estimated payment due date to May 17; (2) a companion bill is being considered in the Senate; and (3) IRS Commissioner Rettig has been called to testify at an April 13 Senate Finance Committee hearing on “The 2021 Filing Season and 21st Century IRS.”

    Despite our efforts, the IRS continues to maintain that the due date for taxpayers required to make a first quarter estimated tax payment will remain as April 15. We are aware that April 15 is fast approaching, and every day relief is not granted presents enormous challenges for many taxpayers and their CPAs. We remain grateful for the pending Congressional relief and hopeful that those of you continuing to struggle at this late hour will benefit.

    Q1 2021 estimated tax payment

    We have received thousands of questions from tax practitioners, business organizations, governmental entities and even some desperate taxpayers with nowhere else to turn, about how to handle the payment of the 1st quarter 2021 estimate, which as of the time of this statement, is due April 15. Additionally, tax practitioners have sought clarification on the treatment of applying overpayments to the 1st quarter estimate from a Form 1040 if a payment is made with the federal extension, Form 4868 that might be filed by May 17. This has long been a standard practice and is helpful when taxpayers and their CPAs do not have sufficient information or time to prepare and file a complete and accurate return and corresponding quarterly payment amount. The issue in question is whether payments made with the extension on May 17 will be counted as timely when applied back. There is no conclusive guidance available from the IRS on how to handle this issue.

    While not ideal, our recommended course of action to ensure that the 1st quarter 2021 estimate is credited to April 15, is to pay the estimate on a Form 1040-ES or make an online payment directed to 2021 on or before April 15. Given that we are not certain that a payment with a Form 4868, even if paid by April 15, will be credited by the IRS as paid by April 15, this recommendation is the most conservative approach.

    Unfortunately, a clear answer does not exist, and opinions are mixed. However, we were able to gather information on best practices. While we cannot advise on an authoritative solution, we hope that our small firm members and those without a large network will have access to options, to create their own process, or receive validation that they are not alone in their chosen approach.

    In some cases, CPAs have indicated to us that if the amount of the estimated tax payment is “immaterial,” they are including the payment with an extension at May 17 – not making an April 15 estimated payment - and informing their clients of the potential for additional calculated interest for one month. Others are planning to file extensions including a 1st quarter payment at April 15.

    Form 709 gift tax return extensions

    Tax year 2020 Form 709 gift tax returns or extensions are due by April 15, 2021 (for taxpayers not in declared disaster areas). IRS has indicated on its website that “Filing Form 4868 or Form 2350 after April 15, 2021 ... will not extend the due date for filing your 2020 federal gift tax return – it only will extend the due date for filing your 2020 income tax return.”

    The best option is to file the Form 4868 to extend both the Form 1040 and the Form 709 with a reasonable estimate by April 15, even though the Form 4868 for extending individuals is not due until May 17 this year.

    The second option is to file Form 8892 by April 15 to extend gift tax returns. This option should be used when a reasonable estimate by April 15 is not possible. We note that there is a checkbox on Form 8892 that indicates “If you are applying for an automatic 6-month extension of time to file Form 709 but are not applying for an extension of time to file your individual income tax return, check here.” If the taxpayer is planning to file the Form 1040 or extend the individual return after April 15 and by May 17 (for taxpayers not in declared disaster areas), some firms are writing “See Attachment” on the line and then on the attachment, writing “Taxpayer will not file for an extension of taxpayer’s income tax return by the due date of the taxpayer’s gift tax return.”

    Despite our efforts to share our concerns on these issues with the IRS, there may still be unanswered questions into next week.

  • 03/18/2021 8:16 AM | Anonymous member (Administrator)

    March 17, 2021

    Washington, D.C. – Following weeks of calls from the American Institute of CPAs (AICPA), Members of Congress and other groups to extend the April 15th filing and payment deadline, the Internal Revenue Service (IRS) announced today that it would extend the filing and payment deadline for some – but not all – taxpayers for the 2021 tax season from April 15th to May 17th.

    “While we appreciate the IRS’ recognition that a filing deadline postponement is indeed necessary, the announcement is far too selective in who is receiving relief,” said AICPA President and CEO Barry Melancon, CPA, CGMA. “In fact, the taxpayers who are most likely to benefit from this additional time are taxpayers who are able to meet the original filing deadline.”

    According to an IRS press release, the relief does not include estimated tax payments that are due on April 15th. This IRS extension does not extend to the millions of small business owners and individuals who pay estimated taxes and the following:

    • Trust income tax payments and return filings on Form 1041
    • Corporate income tax payments and return filings on various Forms 1120

    “Americans, individuals and small businesses have been impacted immeasurably. The fact is virtually all aspects of the federal government and state and local governments have also been impacted. A fair assessment might conclude, for a variety of reasons, that the IRS has been affected more than other federal agencies. I believe taxpayers and practitioners understand this,” Melancon continued. “It is commendable that the IRS wants to demonstrate a return to normalcy. However, the IRS, through no fault of their employees, is seeing significant backlogs, inundated phone lines, unopened mail by the millions and systems sending out unwarranted notices. Extending all tax returns due to June 15th exhibits an understanding of the IRS' impact on the American public.”

    In letters to the Department of the Treasury and the IRS, AICPA has emphasized that the benefits of extending the payment and filing deadline to June 15th would ease the impact of the pandemic on taxpayers – especially small businesses – and tax practitioners and help many states maintain revenue levels within their current fiscal years.

    Failure to include estimated payments nullifies any benefit of a postponement since the tax return work has to be done to calculate estimated payments. More than 9.5 million individual returns filed in for the 2018 tax year included estimated payments.

    “This selective decision by the IRS unfortunately creates more bureaucracy and confusion and is out of sync with real world stresses that taxpayers, tax practitioners and small businesses are dealing with,” said Melancon.


    • In a letter sent earlier last month, the AICPA called attention to the hardship that millions of taxpayers and tax practitioners are facing while making good faith efforts to comply with their tax obligations. The AICPA called for relief from underpayment and late payment penalties for the 2020 taxable year.
    • Late last month, the AICPA sent a letter urging the Department of the Treasury and the IRS to provide taxpayers with more certainty and stability by announcing any pending tax filing and payment deadline postponements. Additionally, the AICPA called for Treasury and the IRS to provide underpayment and late payment penalty relief, delay collection activities and expand the temporary e-signature relief to the millions of taxpayers affected and working through the challenges created by the COVID-19 pandemic.
    • A subsequent statement released by the AICPA again urged action by Treasury and the IRS and reiterated the need for filing and payment extension and urgency of doing it now.
    • The AICPA released a statement yesterday addressing criticism of a deadline postponement and reiterating the need for a payment and filing deadline extension to June 15th.
  • 03/15/2021 1:40 PM | Deleted user

    Amanda Ross Edwards PhD

    As CPAs and their clients work through the massive business changes brought on by the coronavirus pandemic, they confront a variety of fraud schemes, business continuity issues and damages concerns. Fraud in particular thrives in times of crisis as bad actors take advantage of fear and confusion. Certified in Financial Forensics (CFF®) credential holders have the knowledge and expertise to assist clients during these unprecedented times.

    The CFF® is granted exclusively to CPAs and other recognized equivalents who demonstrate expertise in financial forensic accounting through their knowledge, skills, experience and adherence to professional standards.

    The CFF® adds credibility and indicates expertise and competency in areas that include:

    • fraud detection, prevention and response

    • financial statement misrepresentation

    • digital forensics

    • bankruptcy and insolvency

    • damages calculations and dispute resolution

    • expert witness services

    • investigations

    • family law services

    Now is the time to upskill

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  • 03/11/2021 9:15 AM | Anonymous member (Administrator)

    March 10, 2021

    By Alistair M. Nevius, J.D.

    The House of Representatives passed the American Rescue Plan Act, H.R. 1319, on Wednesday by a vote of 220–211. It now goes to President Joe Biden for his signature. He is expected to sign it quickly.

    H.R. 1319 was first passed by the House on Feb. 27. The Senate made several amendments and passed its version of the bill on March 6. The bill then came back to the House for a final vote on Wednesday.

    Among the act’s many provisions are several tax items. Most of the tax provisions that were in the House version of the bill were unchanged in the Senate’s version, but the tax treatment of 2020 unemployment benefits, the phaseout ranges for economic impact payments, and the treatment of student loan debt forgiveness were changed by the Senate.

    Here is a look at the final version of the tax provisions:

    Unemployment benefits

    The act makes the first $10,200 in unemployment benefits tax-free in 2020 for taxpayers making less than $150,000 per year.

    Recovery rebates

    The act creates a new round of economic impact payments to be sent to qualifying individuals. The same as last year’s two rounds of stimulus payments, the economic impact payments are set up as advance payments of a recovery rebate credit. The act creates a new Sec. 6428B that provides individuals with a $1,400 recovery rebate credit ($2,800 for married taxpayers filing jointly) plus $1,400 for each dependent (as defined in Sec. 152) for 2021, including college students and qualifying relatives who are claimed as dependents. As with last year’s economic impact payments, the IRS will send out the advance payments of the credit.

    For single taxpayers, the credit and corresponding payment will begin to phase out at an adjusted gross income (AGI) of $75,000, and the credit will be completely phased out for single taxpayers with an AGI over $80,000. For married taxpayers who file jointly, the phaseout will begin at an AGI of $150,000 and end at AGI of $160,000. And for heads of household, the phaseout will begin at an AGI of $112,500 and be complete at AGI of $120,000.

    The act uses 2019 AGI to determine eligibility, unless the taxpayer has already filed a 2020 return.

    COBRA continuation coverage

    The act provides COBRA continuation coverage premium assistance for individuals who are eligible for COBRA continuation coverage between the date of enactment and Sept. 30, 2021. The act creates a new Sec. 6432, which allows a COBRA continuation coverage premium assistance credit to taxpayers. The credit is allowed against the Sec. 3111(b) Medicare tax. The credit is refundable, and the IRS may make advance payments to taxpayers of the credit amount.

    The credit applies to premiums and wages paid after April 1, 2021, and through Sept. 30.

    Under new Sec. 6720C, a penalty is imposed for failure to notify a health plan of cessation of eligibility for the continuation coverage premium assistance.

    Taxpayers who receive the COBRA continuation coverage premium assistance credit are not also eligible for the Sec. 35 health coverage tax credit.

    Under new Sec. 139I, continuation coverage premium assistance is not includible in the recipient’s gross income.

    Child tax credit

    The act expands the Sec. 24 child tax credit in several ways and provides that taxpayers can receive the credit in advance of filing a return. The act makes the credit fully refundable for 2021 and makes 17-year-olds eligible as qualifying children.

    The act increases the amount of the credit to $3,000 per child ($3,600 for children under 6). The increased credit amount phases out for taxpayers with incomes over $150,000 for married taxpayers filing jointly, $112,500 for heads of household, and $75,000 for others, reducing the expanded portion of the credit by $50 for each $1,000 of income over those limits.

    The IRS is directed to estimate taxpayers’ child tax credit amounts and pay monthly in advance one-twelfth of the annual estimated amount. Payments will run from July through December 2021.

    The IRS must set up an online portal to allow taxpayers to opt out of advance payments or provide information that would be relevant to modifying the amount.

    The taxpayer in general will have to reconcile the advance payment amount with the actual credit amount on next year’s return and increase taxable income by the excess of the advance payment amount over the actual credit allowed. But taxpayers whose modified AGI for the tax year does not exceed 200% of the applicable income threshold ($60,000 for married taxpayers filing jointly) will have the increase for an excess advance payment reduced by a safe harbor amount of $2,000 per child.

    Earned income tax credit

    The act also makes several changes to the Sec. 32 earned income tax credit. It introduces special rules for individuals with no children: For 2021, the applicable minimum age is decreased to 19, except for students (24) and qualified former foster youth or homeless youth (18). The maximum age is eliminated.

    The credit’s phaseout percentage is increased to 15.3%, and the phaseout amounts are increased.

    The credit would be allowed for certain separated spouses.

    The threshold for disqualifying investment income would be raised from $2,200 to $10,000.

    Temporarily, taxpayers would be allowed to use their 2019 income instead of 2021 income in figuring the credit amount.

    Child and dependent care credit

    The act makes various changes to the Sec. 21 child and dependent care credit, effective for 2021 only, including making it refundable. The credit will be worth 50% of eligible expenses, up to a limit based on income, making the credit worth up to $4,000 for one qualifying individual and up to $8,000 for two or more. Credit reduction will start at household income levels over $125,000. For households with income over $400,000, the credit can be reduced below 20%.

    The act also increases the exclusion for employer-provided dependent care assistance to $10,500 for 2021.

    Family and sick leave credits

    The act codifies the credits for sick and family leave originally enacted by the Families First Coronavirus Response Act (FFCRA), P.L. 116-127, as Secs. 3131 (credit for paid sick leave), 3132 (credit for paid family leave), and 3133 (special rule related to tax on employers). The credits are extended to Sept. 30, 2021. These fully refundable credits against payroll taxes compensate employers and self-employed people for coronavirus-related paid sick leave and family and medical leave.

    The act increases the limit on the credit for paid family leave to $12,000.

    The number of days a self-employed individual can take into account in calculating the qualified family leave equivalent amount for self-employed individuals increases from 50 to 60.

    The paid leave credits will be allowed for leave that is due to a COVID-19 vaccination.

    The limitation on the overall number of days taken into account for paid sick leave will reset after March 31, 2021.

    The credits are expanded to allow 501(c)(1) governmental organizations to take them.

    Employee retention credit

    The act codifies the employee retention credit in new Sec. 3134 and extends it through the end of 2021. The employee retention credit was originally enacted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, and it allows eligible employers to claim a credit for paying qualified wages to employees.

    Under the act, the employee retention credit would be allowed against the Sec. 3111(b) Medicare tax.

    Premium tax credit

    The act expands the Sec. 36B premium tax credit for 2021 and 2022 by changing the applicable percentage amounts in Sec. 36B(b)(3)(A). Taxpayers who received too much in advance premium tax credits in 2020 will not have to repay the excess amount. A special rule is added that treats a taxpayer who has received, or has been approved to receive, unemployment compensation for any week beginning during 2021 as an applicable taxpayer.

    Student loans

    The act amends Sec. 108(f) to specify that gross income does not include any amount that would otherwise be included in income due to the discharge of any student loan after Dec. 31, 2020, and before Jan. 1, 2026.

    Miscellaneous tax provisions

    The act amends Sec. 162(m), for years after 2026, to add a corporation’s five highest-compensated employees (besides the employees already covered by Sec. 162(m)) to the list of individuals subject to the $1 million cap on deductible compensation.

    The act extends the Sec. 461(l) limitation on excess business losses of noncorporate taxpayers for one year, through 2027.

    The act also repeals Sec. 864(f), which allows affiliated groups to elect to allocate interest on a worldwide basis.

    The act provides that targeted Economic Injury Disaster Loan (EIDL) grants received from the U.S. Small Business Administration (SBA) are not included in gross income and that this exclusion from gross income will not result in a denial of a deduction, reduction of tax attributes, or denial of basis increase. Similar treatment is afforded SBA restaurant revitalization grants.

    The act temporarily delays the designation of multiemployer pension plans as in endangered, critical, or critical and declining status and makes other changes for multiemployer plans in critical or endangered status.

    For more on the nontax provisions in the act, see “House Gives Final Approval to $1.9 Trillion Pandemic Aid Bill.”

  • 03/03/2021 8:05 AM | Anonymous member (Administrator)

    March 2, 2021

    By Jeff Drew

    The AICPA called on Congress to extend the application period for the Paycheck Protection Program (PPP) by at least 60 days. 

    The current deadline for PPP applications is March 31, but many applications have run into problems in the U.S. Small Business Administration’s (SBA’s) PPP processing platform, which has refused to accept some applications due to system problems and has caught thousands of other applications in validation checks designed to prevent fraudulent applications from being approved. These validation checks can produce dozens of different error codes, many of which require significant manual labor on the part of lenders and borrowers to rectify.

    “The PPP process issues are many,” Barry Melancon, CPA, CGMA, AICPA president and CEO, said in a press release Tuesday. “It is well documented that small businesses, nonprofits, and the CPAs who advise them are experiencing error codes when submitting a PPP loan application. We continue to provide input to the [SBA] about these problems and are hopeful more progress will be made soon.”

    Adding to the stress is an announcement the administration of President Joe Biden made Feb. 22 saying that the PPP loan calculation formula for sole proprietors, self-employed individuals, and independent contractors would be changed to help those individuals receive more financial support. The SBA has yet to release guidance detailing those changes, though it is expected to do so this week.

    The Biden administration also said in its release that the SBA would accept PPP applicants only from businesses with fewer than 20 employees during a two-week period that started Feb. 24 and ends March 9.

    “We applaud the Biden administration’s efforts to make PPP more inclusive and accessible to underserved businesses,” Melancon said. “However, these changes make it even harder for the smallest business entities — the self-employed and independent contractors — to meet the March 31 deadline.”

    Despite the processing issues, the SBA approved almost 2.2 million PPP loans for a total of $156 billion from the program’s reopening on Jan. 11 through Feb. 28. Congress allocated $284.5 billion to the program in the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260.

    The American Rescue Plan Act of 2021, H.R. 1319, which is under consideration in the Senate after being passed by the House early Feb. 27, provides $7.25 billion more in PPP funds but does not extend the March 31 deadline. The AICPA recommended in its release that Congress extend the deadline in a separate vote.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held every other week, including March 4 at 3 p.m. ET. 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.

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