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  • 08/23/2020 5:39 PM | Anonymous member (Administrator)

    August 21, 2020

    The IRS has suspended the mailing of three notices – the CP501, the CP503 and the CP504 – that go to taxpayers who have a balance due on their taxes. Although the IRS continues to make significant reductions in the backlog of unopened mail that developed while most IRS operations were closed due to COVID-19, this temporary adjustment to processing is intended to lessen any possible confusion that might be associated with delays in processing correspondence received from taxpayers.

    The IRS is taking the step to avoid confusion for taxpayers who previously received a balance due notice (CP14) and mailed a payment to the IRS; however, that payment may still be unopened. The CP501, the CP503 and the CP504 are follow-up notices are typically automatically sent to taxpayers who do not respond to the CP14. These automatic follow-up notices will be temporarily stopped until the backlog of mail is reduced. The IRS will continue to assess the mail inventory to determine the appropriate time to resume the follow-up notices. However, taxpayers who have received but not yet responded to a CP14 balance due notice are encouraged to promptly respond.

    In addition, the IRS has previously announced that these payments in the unopened mail will be posted and credited on the date the IRS received them – rather than the date the agency opened and processed them. The IRS reminds taxpayers in this situation they should not cancel their checks and should ensure funds continue to be available so the IRS can process them to avoid potential penalties and interest. To provide fair and equitable treatment, the IRS is also providing relief from bad check penalties for dishonored checks the agency received between March 1 and July 15 due to delays in this IRS processing.

    As the IRS works to stop these mailings at our processing centers, some taxpayers and tax professionals may still receive these notices during the next few weeks due to delivery of existing mailings.

    Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending. See for options to make payments other than by mail.

  • 08/19/2020 4:47 PM | Anonymous member (Administrator)

    IR-2020-185, Aug. 19, 2020

    WASHINGTON – With millions of Americans now receiving taxable unemployment compensation, many of them for the first time, the Internal Revenue Service today reminded people receiving unemployment compensation (beneficiaries) that they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file their federal income tax return next year.

    By law, unemployment compensation is taxable and must be reported on a 2020 federal income tax return. Taxable benefits include any of the special unemployment compensation authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted this spring.

    Withholding is voluntary. Federal law allows any beneficiary to choose to have a flat 10% withheld from their benefits to cover part or all of their tax liability. To do that, fill out  Form W-4V, Voluntary Withholding Request (PDF), and give it to the agency paying the benefits. Don’t send it to the IRS. If the payor has its own withholding request form, use it instead.

    If a beneficiary doesn’t choose withholding, or if withholding is not enough, they can make quarterly estimated tax payments instead. The payment for the first two quarters of 2020 was due on July 15. Third and fourth quarter payments are due on Sept. 15, 2020, and Jan. 15, 2021, respectively. For more information, including some helpful worksheets, see Form 1040-ES and Publication 505, available on

    Here are some types of payments taxpayers should check their withholding on:     

    • Unemployment compensation includes: Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund
    •   Railroad unemployment compensation benefits
    •  Disability benefits paid as a substitute for unemployment compensation
    • Trade readjustment allowances under the Trade Act of 1974
    • Unemployment assistance under the Disaster Relief and Emergency Assistance Act of 1974, and
    • Unemployment assistance under the Airline Deregulation Act of 1978 Program

    Beneficiaries who return to work before the end of the year can use the IRS Tax Withholding Estimator to make sure they are having enough tax taken out of their pay. Available only on, this online tool can help any worker or pension recipient avoid or lessen their year-end tax bill or estimate the refund they want.

    In January 2021, beneficiaries should receive a Form 1099-G, Certain Government Payments (PDF) from the agency paying the benefits. The form will show the amount of unemployment compensation they received during 2020 in Box 1, and any federal income tax withheld in Box 4. Taxpayers report this information, along with their W-2 income, on their 2020 federal tax return. For more information on unemployment, see Unemployment Benefits in Publication 525.

  • 08/13/2020 4:01 PM | Deleted user

    Washington, D.C. (August 13, 2020) – A memorandum issued this week by President Trump mandating the Treasury Department defer the collection and payment of employee payroll taxes has caused confusion and concern among accountants and businesses. The American Institute of CPAs (AICPA) submitted a letter to Treasury and the Internal Revenue Service (IRS) in response, requesting additional guidance and clarification and providing specific recommendations.

    In the letter, the AICPA requests that Treasury and the IRS provide guidance to address a number of concerns precipitated by the memorandum, including:

    1.    Guidance stating that the deferral is voluntary and that an “eligible employee” is responsible for making an affirmative election to defer the payroll taxes.

    2.    Guidance stating that an “eligible employee” is an employee whose wages are less than $4,000 per bi-weekly pay period.

    3.    Guidance stating that the $4,000 limit should apply separately to each employer of an employee.

    4.    Guidance stating a payment due date(s) for the deferred taxes and a mechanism for employees to pay the deferred taxes.

    A subsequent announcement by Treasury Secretary Steven Mnuchin indicated that the payroll tax deferral would not be mandatory for employers to implement. “Since the taxes being discussed are those ‘imposed on the income of each employee,’ a big question we have is whether or not employees will have the option to opt in or out of the program,” said AICPA Vice President of Taxation, Edward Karl, CPA, CGMA. “Employees should make the deferral decision and should also be responsible for repayment, however, there are certain questions that need to be considered that taxpayers and businesses need guidance on. For example, what if an employee works more than one job? What if the company goes out of business? What if the employee changes jobs? Employers still have to figure out how to implement this policy, but right now, there are too many unknowns.”

  • 06/30/2020 10:55 AM | Deleted user

    Section 2202 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, provides for special distribution options and rollover rules for retirement plans and IRAs and expands permissible loans from certain retirement plans.

    Q1. What are the special rules for retirement plans and IRAs in section 2202 of the CARES Act?

    A1. In general, section 2202 of the CARES Act provides for expanded distribution options and favorable tax treatment for up to $100,000 of coronavirus-related distributions from eligible retirement plans (certain employer retirement plans, such as section 401(k) and 403(b) plans, and IRAs) to qualified individuals, as well as special rollover rules with respect to such distributions. It also increases the limit on the amount a qualified individual may borrow from an eligible retirement plan (not including an IRA) and permits a plan sponsor to provide qualified individuals up to an additional year to repay their plan loans. See the FAQs below for more details.

    Q2. Does the IRS intend to issue guidance on section 2202 of the CARES Act?

    A2. The Treasury Department and the IRS are formulating guidance on section 2202 of the CARES Act and anticipate releasing that guidance in the near future. IRS Notice 2005-92 (PDF), issued on November 30, 2005, provided guidance on the tax-favored treatment of distributions and plan loans under sections 101 and 103 of the Katrina Emergency Tax Relief Act of 2005 (KETRA) as those provisions applied to victims of Hurricane Katrina. The Treasury Department and the IRS anticipate that the guidance on the CARES Act will apply the principles of Notice 2005-92 to the extent the provisions of section 2202 of the CARES Act are substantially similar to the provisions of KETRA that are addressed in that notice.

    Q3. Am I a qualified individual for purposes of section 2202 of the CARES Act?

    A3. You are a qualified individual if –

    You are diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention;

    Your spouse or dependent is diagnosed with SARS-CoV-2 or with COVID-19 by a test approved by the Centers for Disease Control and Prevention;

    You experience adverse financial consequences as a result of being quarantined, being furloughed or laid off, or having work hours reduced due to SARS-CoV-2 or COVID-19;

    You experience adverse financial consequences as a result of being unable to work due to lack of child care due to SARS-CoV-2 or COVID-19; or

    You experience adverse financial consequences as a result of closing or reducing hours of a business that you own or operate due to SARS-CoV-2 or COVID-19.

    Under section 2202 of the CARES Act, the Treasury Department and the IRS may issue guidance that expands the list of factors taken into account to determine whether an individual is a qualified individual as a result of experiencing adverse financial consequences. The Treasury Department and the IRS have received and are reviewing comments from the public requesting that the list of factors be expanded.

    Q4. What is a coronavirus-related distribution?

    A4. A coronavirus-related distribution is a distribution that is made from an eligible retirement plan to a qualified individual from January 1, 2020, to December 30, 2020, up to an aggregate limit of $100,000 from all plans and IRAs.

    Q5. Do I have to pay the 10% additional tax on a coronavirus-related distribution from my retirement plan or IRA?

    A5. No, the 10% additional tax on early distributions does not apply to any coronavirus-related distribution.

    Q6. When do I have to pay taxes on coronavirus-related distributions?

    A6. The distributions generally are included in income ratably over a three-year period, starting with the year in which you receive your distribution. For example, if you receive a $9,000 coronavirus-related distribution in 2020, you would report $3,000 in income on your federal income tax return for each of 2020, 2021, and 2022. However, you have the option of including the entire distribution in your income for the year of the distribution.

    Q7. May I repay a coronavirus-related distribution?

    A7. In general, yes, you may repay all or part of the amount of a coronavirus-related distribution to an eligible retirement plan, provided that you complete the repayment within three years after the date that the distribution was received. If you repay a coronavirus-related distribution, the distribution will be treated as though it were repaid in a direct trustee-to-trustee transfer so that you do not owe federal income tax on the distribution.

    If, for example, you receive a coronavirus-related distribution in 2020, you choose to include the distribution amount in income over a 3-year period (2020, 2021, and 2022), and you choose to repay the full amount to an eligible retirement plan in 2022, you may file amended federal income tax returns for 2020 and 2021 to claim a refund of the tax attributable to the amount of the distribution that you included in income for those years, and you will not be required to include any amount in income in 2022. See sections 4.D, 4.E, and 4.F of Notice 2005-92 for additional examples.

    Q8. What plan loan relief is provided under section 2202 of the CARES Act?

    A8. Section 2202 of the CARES Act permits an additional year for repayment of loans from eligible retirement plans (not including IRAs) and relaxes limits on loans.

    Certain loan repayments may be delayed for one year: If a loan is outstanding on or after March 27, 2020, and any repayment on the loan is due from March 27, 2020, to December 31, 2020, that due date may be delayed under the plan for up to one year. Any payments after the suspension period will be adjusted to reflect the delay and any interest accruing during the delay. See section 5.B of Notice 2005-92.

    Loan limit may be increased: The CARES Act also permits employers to increase the maximum loan amount available to qualified individuals. For plan loans made to a qualified individual from March 27, 2020, to September 22, 2020, the limit may be increased up to the lesser of: (1) $100,000 (minus outstanding plan loans of the individual), or (2) the individual’s vested benefit under the plan. See section 5.A of Notice 2005-92.

    Q9. Is it optional for employers to adopt the distribution and loan rules of section 2202 of the CARES Act?

    A9. It is optional for employers to adopt the distribution and loan rules of section 2202 of the CARES Act. An employer is permitted to choose whether, and to what extent, to amend its plan to provide for coronavirus-related distributions and/or loans that satisfy the provisions of section 2202 of the CARES Act. Thus, for example, an employer may choose to provide for coronavirus-related distributions but choose not to change its plan loan provisions or loan repayment schedules. Even if an employer does not treat a distribution as coronavirus-related, a qualified individual may treat a distribution that meets the requirements to be a coronavirus-related distribution as coronavirus-related on the individual’s federal income tax return. See section 4.A of Notice 2005-92.

    Q10. Does section 2202 of the CARES Act provide additional distribution rights to participants or otherwise change the rules applicable to plan distributions?

    A10. Under section 2202 of the CARES Act, a coronavirus-related distribution is treated as meeting the distribution restrictions for a section 401(k) plan, section 403(b) plan, or governmental section 457(b) plan. For example, under section 2202 of the CARES Act, a section 401(k) plan may permit a coronavirus-related distribution, even if it would occur before an otherwise permitted distributable event (such as severance from employment, disability, or attainment of age 59½). However, the CARES Act does not otherwise change the limits on when plan distributions are permitted to be made from employer-sponsored retirement plans. For example, a pension plan (such as a money purchase pension plan) is not permitted to make a distribution before an otherwise permitted distributable event merely because the distribution, if made, would qualify as a coronavirus-related distribution. Further, a pension plan is not permitted to make a distribution under a distribution form that is not a qualified joint and survivor annuity without spousal consent merely because the distribution, if made, could be treated as a coronavirus-related distribution. See section 2.A of Notice 2005-92.

    Q11. May an administrator rely on an individual’s certification that the individual is eligible to receive a coronavirus-related distribution?

    A11. The administrator of an eligible retirement plan may rely on an individual’s certification that the individual satisfies the conditions to be a qualified individual in determining whether a distribution is a coronavirus-related distribution, unless the administrator has actual knowledge to the contrary. Although an administrator may rely on an individual’s certification in making and reporting a distribution, the individual is entitled to treat the distribution as a coronavirus-related distribution for purposes of the individual’s federal income tax return only if the individual actually meets the eligibility requirements.

    Q12. Is an eligible retirement plan required to accept repayment of a participant’s coronavirus-related distribution?

    A12. In general, it is anticipated that eligible retirement plans will accept repayments of coronavirus-related distributions, which are to be treated as rollover contributions. However, eligible retirement plans generally are not required to accept rollover contributions. For example, if a plan does not accept any rollover contributions, the plan is not required to change its terms or procedures to accept repayments.

    Q13. How do qualified individuals report coronavirus-related distributions?

    A13. If you are a qualified individual, you may designate any eligible distribution as a coronavirus-related distribution as long as the total amount that you designate as coronavirus-related distributions is not more than $100,000. As noted earlier, a qualified individual may treat a distribution that meets the requirements to be a coronavirus-related distribution as such a distribution, regardless of whether the eligible retirement plan treats the distribution as a coronavirus-related distribution. A coronavirus-related distribution should be reported on your individual federal income tax return for 2020. You must include the taxable portion of the distribution in income ratably over the 3-year period – 2020, 2021, and 2022 – unless you elect to include the entire amount in income in 2020. Whether or not you are required to file a federal income tax return, you would use Form 8915-E (which is expected to be available before the end of 2020) to report any repayment of a coronavirus-related distribution and to determine the amount of any coronavirus-related distribution includible in income for a year. See generally section 4 of Notice 2005-92.

    Q14. How do plans and IRAs report coronavirus-related distributions?

    A14. The payment of a coronavirus-related distribution to a qualified individual must be reported by the eligible retirement plan on Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. This reporting is required even if the qualified individual repays the coronavirus-related distribution in the same year. The IRS expects to provide more information on how to report these distributions later this year. See generally section 3 of Notice 2005-92.


  • 06/30/2020 8:56 AM | Anonymous member (Administrator)

    IRS has easy ways to help taxpayers who need more time or payment options 

    IR-2020-134, June 29, 2020

    WASHINGTON ― The Department of the Treasury and IRS today announced the tax filing and payment deadline of July 15 will not be postponed. Individual taxpayers unable to meet the July 15 due date can request an automatic extension of time to file until Oct. 15.

    Due to COVID-19, the original filing deadline and tax payment due date for 2019 was postponed from April 15 to July 15.

    The IRS reminds taxpayers filing Form 1040 series returns that they must file Form 4868 by July 15 to obtain the automatic extension to Oct. 15. The extension provides additional time to file the tax return – it is not an extension to pay any taxes due.

    The IRS urges people who owe taxes, even if they have a filing extension, to carefully review their situation and pay what they can by July 15 to avoid penalties and interest. For people facing hardships, including those affected by COVID-19, who cannot pay in full, the IRS has several options available to help. To avoid interest and penalties, the IRS encourages them to pay what they can and consider a variety of payment options available for the remaining balance.

    “The IRS understands that those affected by the coronavirus may not be able to pay their balances in full by July 15, but we have many payment options to help taxpayers,” said IRS Commissioner Chuck Rettig. “These easy-to-use payment options are available on, and most can be done automatically without reaching out to an IRS representative.”

    Automatic Extension of Time to File
    Taxpayers who need more time to prepare and file their federal tax return can apply for an extension of time to file until Oct. 15. To get an extension, taxpayers must estimate their tax liability on the extension form and pay any amount due.

    Individual taxpayers have several easy ways to file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by the July 15 deadline. Tax software providers have an electronic version available. In addition, all taxpayers, regardless of income, can use IRS Free File to electronically request an automatic tax-filing extension.

    Save a step: Get an extension when you make a payment 
    Taxpayers can also get an extension by paying all or part of their tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card. When getting an extension by making a payment, taxpayers do not have to file a separate extension form and will receive a confirmation number for their records.

    State deadlines may differ
    The IRS also reminds taxpayers to check their state filing and payment deadlines, which may differ from the federal July 15 deadline. A list of state tax division websites is available through the Federation of Tax Administrators.

    Payment options
    Taxpayers who owe taxes can choose from the following payment options:

    The IRS recommends that taxpayers who are unable to pay their taxes in full should act as quickly as possible. Tax bills can quickly accumulate more interest and penalties the longer they sit. 

    Several payment options are available on to help taxpayers who can’t pay in full and some can offer taxpayers smaller penalties. Though interest and late-payment penalties continue to accrue on any unpaid taxes after July 15, the failure to pay tax penalty rate is cut in half while an installment agreement is in effect. The usual penalty rate of 0.5% per month is reduced to 0.25% For the calendar quarter beginning July 1, 2020, the interest rate for underpayment is 3%.

    Most taxpayers who cannot pay in full have the following payment options:

    • Online Payment Agreement — These are available for individuals who owe $50,000 or less in combined income tax, penalties and interest and businesses that owe $25,000 or less in combined payroll tax, penalties and interest and have filed all tax returns. Most taxpayers qualify for this option, and an Online Payment Agreement can usually be set up in a matter of minutes on Online Payment Agreements are available Monday – Friday, 6 a.m. to 12:30 a.m.; Saturday, 6 a.m. to 10 p.m.; Sunday, 6 p.m. to midnight. All times are Eastern time. Certain fees may apply.
    • Installment Agreement — Taxpayers who do not qualify to use the online payment agreement option, or choose not to use it, can also apply for a payment plan by phone, or by mail by submitting Form 9465, Installment Agreement Request. Installment agreements paid by direct deposit from a bank account or a payroll deduction will help taxpayers avoid default on their agreements. It also reduces the burden of mailing payments and saves postage costs. Certain fees may apply.
    • Temporarily Delaying Collection — You can contact the IRS to request a temporary delay of the collection process. If the IRS determines a taxpayer is unable to pay, it may delay collection until the taxpayer's financial condition improves. Penalties and interest continue to accrue until the full amount is paid.
    • Offer in Compromise — Certain taxpayers qualify to settle their tax bill for less than the amount they owe by submitting an offer in compromise. To help determine eligibility, use the Offer in Compromise Pre-Qualifier tool.

    In addition, taxpayers can consider other options for payment, including getting a loan to pay the amount due. In many cases, loan costs may be lower than the combination of interest and penalties the IRS must charge under federal law.

  • 04/10/2020 8:14 AM | Anonymous member (Administrator)

    We know there is frustration around providing services to your small business clients as they apply for Paycheck Protection Program (PPP) loans being issued through the Small Business Administration (SBA). Many firms want to be recognized as an agent for the client and be compensated for their services under the agent fee section of the PPP guidance, but are concerned they will not receive payment from lenders.

    AICPA guidance released last week supports firms that provide advice, guidance and support outside of loan preparation assistance, as defined under the program. The fees related to this work would be billed to and paid by the client. This is not new – firms have provided small business assistance, advice and guidance for years as clients have applied for loans with the SBA. This was done in the normal course of business for the firm and can still be done today. We encourage you to provide small businesses the guidance they need.

    As with other SBA loans, the PPP also provides opportunities for the CPA to be an agent, including assisting a small business client by preparing the PPP loan application and supporting documentation. The definition of an agent within the SBA materials is essentially the same definition the SBA has had in place for years. What is new is the sliding scale agent fee specifically to be paid out of the lenders fee.

    We support CPAs being the agent when it is the appropriate course of action, but there are areas to be aware of in entering this type of engagement:

    • For assurance clients, being an agent impairs independence. If you wish to keep this assurance relationship, we suggest you do not act as an agent or sign as the authorized representative on a client’s PPP loan application. Make no certifications as to the information the small business is providing with the application. Advising your client, however, is totally appropriate, and we encourage it.
    • The law is clear that agents cannot collect a fee from an applicant but must instead collect a fee from the lender. If you choose to be an agent, we suggest you contact the lender before embarking on the engagement and get a written agreement with them so you get paid. You should have a conflict waiver in the agreement with the lender, just like in your loan assistance engagement letter with the client. Disclose this arrangement with your client as well.
    • Firms generally do not sign their clients’ loan applications. In those instances in which you do sign, you should obtain a hold harmless/indemnification agreement from the client relating to client-provided information, and state that you are not making or joining any of the client’s certifications in the application.
  • 04/08/2020 8:33 AM | Anonymous member (Administrator)

    Washington, D.C. (April 7, 2020) – American Institute of CPAs (AICPA) President and CEO, Barry Melancon, CPA, delivered a letter to Treasury Secretary Steven Mnuchin expressing concern that, while the Department of the Treasury delayed the April 15th filing deadline, they have failed to grant extensions for all filing and payment deadlines.

    In the letter, Melancon explains, “We believe it is impractical, if not impossible, for taxpayers and their advisors to continue business as usual when IRS’s own operations are minimally operable.”

    The AICPA renewed its request for an immediate expansion of tax-related relief to all types of returns and payments due between March 3rd and July 15th and outlined several outstanding issues, including:

    • Other forms and elections: The due dates of additional forms and elections, such as the election to be taxed as a small business, need additional time.
    • Individual and corporate estimated payments: The first quarter individual and corporate estimates, which are typically due on April 15, were deferred to July 15. However, the IRS has not yet extended the second quarter deadline, which is still set at June 15.
    • E-signatures: It is also important for the IRS to take whatever measures are possible to allow taxpayers and their preparers to utilize technology, such as e-signatures, to keep a safe distance from others during the pandemic.
    • Information and other returns: Other returns due between March 3 and July 15, such as for certain estates, exempt organizations and other businesses, also need relief.
    • International filing situations: US citizens living abroad or non-resident taxpayers who cannot leave may also be challenged to file.
    • Payment, penalty and administrative questions: Treasury and IRS should offer generous and automatic relief for other issues related to administrative actions such as expiring statutes of limitations, the processing of correspondence and other actions not already covered by previous relief but related to COVID-19.

    Over the last month, the AICPA has advocated on behalf of taxpayers and their advisors to provide relief in the midst of uncertainty during these unprecedented and challenging times:

    • March 11 – the AICPA called for the Treasury Department and the IRS to provide relief to all taxpayers in light of the uncertainty and challenges caused by the spread of the coronavirus.
    • March 13 – the AICPA expressed great concern that the Treasury and IRS had not yet announced a tax filing extension given the impending tax return deadline of March 15th for many businesses.
    • March 13 – following a national emergency declaration, the AICPA urged the IRS to announce specific details regarding the extension of impending filing and payment deadlines.
    • March 18 – AICPA President & CEO, Barry Melancon, CPA, released a statement in response to Treasury’s announcement of interest and penalty relief, but not tax filing relief.
    • March 19 – the AICPA expressed support for legislation sponsored by Senator John Thune to grant taxpayers a filing deadline extension until July 15th.
    • March 20 – the AICPA publicly thanked members of Congress and the Treasury Department for April 15th tax filing extension.
    • March 25 – the AICPA called on Treasury and the IRS to provide more extensive relief to taxpayers.
    • March 27 – the AICPA urged Treasury and the IRS to provide broader tax filing and payment relief.
    • April 2 – following the IRS announcement of temporary closures of critical services, the AICPA expressed urgency in providing broader tax filing and payment relief.

    Melancon closed the letter by stating, “While we immediately need broad relief until July 15, we continue to urge Treasury and IRS to develop a contingency plan for the next phase of relief should that be needed. As a country, we should not risk anyone’s life to meet tax filing obligations.”

  • 03/31/2020 3:41 PM | Anonymous member (Administrator)

    By Nick Spoltore, Esq.

    March 30, 2020

    The Coronavirus Aid, Relief, and Economic Security Act (CARES Act, H.R. 748, hereinafter “the Act”) was enacted into law on March 27, 2020. It contains many tax provisions which will impact your practice immediately. This post highlights the major tax law changes contained in the Act.

    QIP Fix

    As you know, Qualified Improvement Property should have been provided a 15-year recovery period under TCJA. The text was inadvertently left out and QIP was ineligible for 100% Bonus Depreciation. The Act fixes the TCJA error and designates QIP as 15-year property for depreciation purposes, a category eligible for 100% Bonus Depreciation. This change is effective for property placed in service after December 31, 2017.

    But remember if you elected out of §163(j), you’re out of luck on the Bonus Depreciation.

    Increase of §163(j) Limit

    The Act increases the limitation in §163(j)from 30% to 50% for tax years beginning in 2019 and 2020. The limitation will not apply to partnership partners in 2019. Special rules apply for the treatment of excess business interest allocated to a partner in any tax year beginning in 2019. In addition, a taxpayer may elect to calculate the interest limitation for the tax year beginning in 2020 utilizing the adjusted taxable income for the last tax year beginning in 2019 as the base. For partnerships, the election must be made by the partnership.

    461(l) Deferral

    The Act suspends the $250k/$500k loss limitation for noncorporate taxpayers. Excess business losses arising in 2018, 2019, and 2020 can be deducted.


    For tax years beginning after December 31, 2017, the Act temporarily removes the 80% of taxable income limitation so that NOLs fully offset income. In addition, NOLs arising in a tax year beginning after December 31, 2018 and before January 1, 2021 may be carried back five years.

    Employer Payroll Taxes

    The Act allows taxpayers to defer paying the employer portion of certain 2020 payroll taxes effective for payments due after the Act’s enactment. Half will be due on December 31, 2021 with the remainder due on December 31, 2022.

    Payroll Tax Credit

    The Act provides a refundable payroll tax credit for 50% of wages paid by certain employers to certain employees during the COVID-19 crisis. The credit is available to employers whose operations have been fully or partially suspended or whose quarterly receipts declined more than 50% year over year. Other restrictions apply, and the number of full-time employees is relevant. Wages include health benefits and are capped at the first $10,000. This credit applies to wages paid after March 12, 2020 and before January 1, 2021.

    Rebate Checks

    The Act provides a refundable credit for 2020 equal to $1,200 ($2,400 for individuals filing joint returns) plus $500 for each qualifying child of the taxpayer. Phaseout occurs at $75,000 to $99,000 for a Single filer, $150,000 to $198,000 for a joint return with no children, and $112,500 to $146,500 for HOH with one child.

    These direct payments are arguably the most talked about provision in the entire legislation. Our CARE webinar will cover the rebates, including widespread eligibility, in extraordinary detail so you can fluently discuss these with your clients. Receipt of unearned, untaxed money will undoubtedly be a pleasant topic welcomed by your clients and similarly will create goodwill to augment your bottom line.

    No Penalty for Coronavirus-Related Retirement Plan Distributions

    Any 2020 coronavirus-related distribution up to $100,000 from an eligible retirement plan will not incur the §72(t) 10% additional tax and may be included in income over three years. Distributions can also be contributed back to an eligible retirement plan within the three-year period.

    No 2020 RMDs

    IRAs and certain defined contribution plans will have no required minimum distributions for 2020.

    There are other tax related topics in the Act which due to blog brevity I have not detailed herein. Eligible student loan payments, donations of food inventory, limitations on cash contributions, and an above the line $300 charitable contribution are chief among them. In much the same manner, this post was written with a broad brush due to the length and complexity of the Act. But don’t fear since our CARE webinar will comprehensively present the Act’s topics with the full amount of detail they are due. Join our panel of tax experts as they explain the relevant aspects of this new legislation with acumen specifically designed to impart to you exactly the info you’ll need for your clients’ tax consultation, preparation, and planning. Multiple dates of CARE are scheduled for your convenience, and you can sign up HERE.

    Nick Spoltore is VP of Tax & Advisory Content for Surgent CPE. Mr. Spoltore is a graduate of the University of Notre Dame and of Delaware Law School. Before joining Surgent, he practiced tax and business law at the firm of Heaney, Kilcoyne in Pennsylvania and also in Delaware.

  • 03/24/2020 3:27 PM | Anonymous

    Success as a remote worker begins with developing a few simple rules that will allow you to be engaged and intentional about your work and will create a positive experience.

    1. Your home office: Ensure your office is in a part of your home that is quiet and away from home and family distractions.

    2. A door is a must: Have a door and use it. A great way to put yourself in a ‘work’ mindset is to open and shut your door just like you would if you were going into the office. When you enter in the morning open and shut your door, then upon leaving, do the same.

    3. Get tough with distracting people: Have a conversation with your family about the rules of working from home. ‘When the door is shut, please don’t disturb me. When I am on my lunch break, we can talk.’

    4. Dress like you are a professional: The act of getting dressed for work is important to changing your mindset from home to work. This does not have to mean business casual, but it also should not mean pajamas. Dress for your day!

    5. Setup your desk like the office: Talk to your firm about setting up your home office desk just like your office. If you have duel monitors, ask for them at home. If you have a scanner, ask for one at home. If you have an office phone, set up forwarding to your home or cell phone. The more you can replicate, the more it will feel like you can work the same remotely.

    6. Set specific work and break hours that are clear and transparent: Communicate with your supervisor about the work and break hours that will work best for your firm. Ensure that they are clear and then add them to your calendar and/or send a message to everyone. Transparency in this area is necessary for success.

    7. Insure you have a stable internet connection: Your connection to the office is completely reliant to the internet. Shop around for the fastest and most reliable connection in your geographic area. You may have to invest more, but that is the price that you will be paying for the opportunity to work remotely.

    8. Learn to use Skype, Google Hangout and/or Zoom: While you may not be able to physically see your team as much as you have in the past, you can still take the time to see them through various video technologies. Talk to your firm about their preference and then learn to become adept in its usage.

    9. Get a headset: Where a headset was an option before, when working at home with video technology, it is a necessity. Find one that will work with your technology solutions.

    10. Don’t mix work and personal life: Work when you are on work hours and do personal tasks when you are on personal time. Sneaking in a load of laundry or starting dinner at the end of the day is fine but know when to draw the line. Equate your small home tasks to a quick walk to the break room for a glass of water or a chat with a coworker that only takes a few minutes. Do your best to replicate your office schedule when you are at home.

    This resource was developed by PCPS in conjunction with Boomer Consulting. Find more resources and information about employee engagement in the AICPA PCPS Human Capital section.

    This tool is an example of the turnkey practice management tools and resources PCPS delivers. 

    PCPS is an add-on firm membership section within the AICPA.  A PCPS firm membership at only $35 per CPA, up to a max of $700 per firm, is a great investment for a broad range of practice management resources.  Find out if you are already a PCPS member or register for a virtual tour to learn more.

  • 03/17/2020 7:47 PM | Anonymous member (Administrator)

    NASBA, AICPA, Prometric and the Boards of Accountancy (Boards) have been monitoring the COVID19 crisis and have taken the following actions to ensure the health and safety of our CPA Exam candidates.

    Effective immediately, Prometric will close test centers in the United States and Canada for a period of 30 days. They anticipate re-opening test centers on April 16, 2020, however, please note the specific date will depend on circumstances that are changing daily. No action is required on the part of the candidate. Prometric will cancel scheduled appointments and clear the Notices to Schedule (NTS) for candidates to reschedule at their convenience.

    NASBA has recommended that the Boards of Accountancy extend all NTS with expirations between April 1 – June 30, 2020, until September 30, 2020.  At this time, no action is required by candidates and there is no need to contact NASBA or your Board of Accountancy. Please monitor our social media channels and website for updates on when the NTS extensions are completed.

    NASBA will identify all candidates who have an open NTS and credit expiring through June 30, 2020, and provide this information to Boards with a recommendation to grant an extension of credit if the candidate is impacted by circumstances beyond their control. Due to shutdowns of many board offices, the decisions to extend conditional credit will not be finalized until Boards resume normal operations. There is no need to contact Boards at this time.   

    NASBA remains committed to maintain operating hours, however, many of our staff are working remotely. The best way to contact us during this time is via email at Again, please monitor our social media channels and websites for updates on our operating status

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