BulldogTom

Maybe this should be under covid 19 forum. Partnership is accrual based. They pay an annual tax to the state of CA based on the prior year income and the number of tables the facility is licensed to operate. The tax is normally due in April. Because of Covid 19 the state of CA granted an extension of time to pay until November 2020, then extended the time until June of 2021. Are they going to be deductible on the 1065 return as state taxes? For accounting purposes, the matching principle should govern the treatment on the financial statements, but I am unsure if they can be deducted if not required to be paid until the next year. Thanks Tom Modesto, CA

I see answerconnect prime comes with the MAX package this year. Is this the full version or a teaser to get you to buy a full package from them? I don't remember getting it in prior years. Tom Modesto, CA

Has anyone had any experience with Microsoft Teams? Tom Modesto, CA

We all have to have this written digital security plan in place this year as a requirement for our PTINs. Does anyone have a template version they would be willing to share? I keep thinking I can do this myself but now I am not so sure. What are the rest of you doing? Tom Modesto, CA

I am kinda on the other side of this. If the client wants to know when and who you talked to at the IRS, just tell them. By acting like you have something to hide, you fuel their concerns. I would "dummy down" the notes if they are very detailed. Change to something like "Spoke to Mr. West ID#1000XXXXX on xx/xx/2020 concerning client 1040X. Mr. West confirmed that IRS is still in backlog and that interest and penalties will clear up when 1040X processed". And that is the truth, so why not put it in writing. What is he going to do, sue you? Wait till he sees the backlog at the courts because of Covid. He will get his refund, and the next 3 or 4 refunds, long before he gets a hearing. Sometimes, people just don't trust anybody and they are looking for a reason to be upset, especially now. If you give him the notes, or the summary version of the notes, the problem goes away. My humble opinion. Your practice, your decision on how to proceed. Tom Modesto, CA

We need to get together at Rita's farm (or is it a cemetery?) again. If TN EA Society has a seminar this summer, I can go back again. That was fun meeting you all. Tom Modesto, CA

No. No. No. We are not. When the government makes so many intrusions into our life, demanding we do work for them, with no thought or allowance for our personal issues or struggles, then they should be treated the same way. If the NBA can put a bubble up and complete their season, then the IRS should be able to do the same. Put them all in a hotel next to the service centers and make them work from the bubble until the backlog is completed. Sorry to sound so unfeeling or uncaring. I know the people who work there are our neighbors, but the job needs to get done and I don't see a sense of urgency from the service to do the work of the people that they are charged to do. Tom Modesto, CA

Thanks. I learned something new today. Tom Modesto, CA

Working with the bank on the PPP forgiveness application. We are electing an alternative covered period as the disbursement date landed the day before the next regular bi-weekly payroll period began. Loan disbursed on 5/7/20, first day of the alternative period is 5/8/20 and last day of the alternative period is 10/22/20. On 5/14 payroll for the week ending 5/7/20 was paid to the employees, but it was for wages incurred before the covered period began. So we excluded it from the calculation. On 10/29/20, payroll was paid for the pay period ending 10/22/20. We included it in the calculation as incurred cost paid on the next regularly scheduled payroll date. The bank says we don't need to exclude the payroll checks cut on 5/14/20. They say we get that payroll as well as the incurred but not paid in the covered period payroll that was paid on 10/29/20. Seems to me they are giving me too much payroll. It does not matter, because there is enough either way to cover the full amount of the loan, so I am not sweating it. But this interpretation by the bank seems very generous. I thought you got one or the other, either paid in the covered period or incurred in the covered period. Maybe I was wrong in my understanding. Tom Modesto, CA

@PossiI don't know if you have the correct perspective on this situation. I would love to have 3 Million clients returns in backlog who could not go to another business to get their tax work done. I think the IRS must have hired some Ivy League MBA to create their business plan. It is brilliant. Tom Modesto, CA

@cbsleeThis post got off track somewhere. Were you able to help your client with their issues? Tom Modesto, CA

OK, maybe I am doing something wrong. I send email/Fax and I wait hours or days to get a confirmation email that the fax was successfully sent. How are you getting these in minutes? Or do I have to log into some website to see the confirmation? I have never done anything like that. BTW, I still have not received a confirmation email from the fax I sent that started this thread on Friday. Please help. Thanks Tom Modesto, CA

I have had efax for many years. It seems to me that it is taking longer and longer to get confirmation emails from them. I sent a fax to the IRS this morning and I am still waiting (over 2 hours and counting) for the confirmation email. I was lucky that the IRS agent on the PP line was willing to check to see if the POA was on his machine. I cannot deal with this anymore. Are any of you using a service that you get real-time confirmation of delivery for your faxing service? Do I need to go back to a landline in my office and hook up an old fax machine? I only send a couple of faxes every month, and at $16.95 a month, it is just starting to seem too expensive for too little functionality. Thanks Tom Modesto, CA

Praying for this to happen. Tom Modesto, CA

Not True. I went through this myself with a vendor I cancelled service with who charged me an annual fee months later. I changed banks because Rabobank (Robberbank in my world) has a policy that electronic transfers from your account must be challenged by the next business day. Otherwise it is considered legit on their part. Now I bank with US Bank, but i think the rules are the same. Tom Modesto, CA

2020-68: IRS releases PPP deduction guidance November 18, 2020 In newly released formal guidance, the IRS has confirmed that taxpayers with a reasonable expectation of PPP loan forgiveness may not deduct expenses paid with those funds, even if the forgiveness has not been granted prior to the end of the taxable year. (Rev. Rul. 2020-27) In the guidance released today, the IRS states that because taxpayers calculate their forgiveness based on eligible expenses paid with PPP funds, the forgiveness of the loan amounts used for those expenses is reasonably expected to occur, and under IRC §265 taking the deductions would be inappropriate. The IRS supplemented this guidance with additional guidance that states taxpayers who do not apply for forgiveness, or whose forgiveness requests are reduced or denied, may take deductions for expenses paid with the amounts that are not forgiven. (Rev. Proc. 2020-51) Tom Modesto, CA

Nope. Tom Modesto, CA

They have moved on from Yahoo! and AT&T and started with Microsoft. I get something similar from Yahoo or AT&T about every month telling me the same thing. Tom Modesto, CA

Here is what the CPA sent me. Second bullet under "Payroll Costs". I hope this does not violate any copywrite laws by putting this on here. Tom Modesto, CA0463_001.pdf

At my day job, our employees receive tips. When I put together a draft of our PPP Loan Forgiveness Application, I excluded the cash tips reported by the employees, under the theory that the company did not pay those tips to the employees. I sent my work over to our outside CPA firm and they questioned my calculations. They sent me some material from Spidell (who I have the greatest respect for) showing that cash tips should be included in the amount of payroll to include on the forgiveness application. I am not questioning the CPA or Spidell, I am just trying to wrap my head around why an amount that was not paid by the employer, but by the customers, would be allowed in the calculation for forgiveness? Thanks for all responses. Tom Modesto, CA

She should have re-titled the property. It should be done now. Go to the county records department with the death certificate and do this now. It needs to be done. Then try to figure out the step up in basis for future sales purposes. Any other joint property (bank accounts, CDs, Brokerage Accounts, rental property, etc) should be retitled immediately as well. If there were any stocks in a joint brokerage account, there is a step up in basis as well. Not enough info to talk about an estate return, but since there is a refi in progress, I am guessing they probably did not have enough assets to worry about death taxes. Hopefully, a tax return was filed in the year of death indicating the spouse died, so the IRS records are clean. Even if there was no filing requirement, I always advise my clients to file a return in the year of death to make sure the IRS records are updated (fraud?). Just my thoughts and what I share with my clients in this situation. Tom Modesto, CA

I think that is appropriate, and that is all you can do. Tom Modesto, CA

It amazes me every time I watch someone else using Excel. There are so many ways to accomplish the same task. I was teaching a Jr. accountant how to do a bank rec yesterday, and watching him use Excel was an exercise in patience on my part. But it worked for him, and he got to where he wanted to go. And probably just as fast as I would have gotten there. Over time I am learning that everyone has a different way their mind works to get an answer. What is obvious to me as the best way to accomplish a task is not always the best way for someone else. It took me a long time to get to the point where I can recognize this phenomena...sometimes. But my way is still best...at least in my office where I am the boss. Tom Modesto, CA

Deferring the tax hit into next year is a valid strategy. But one of my clients asked "What if Biden wins and the tax rate on my corp goes from 21% to 39% next year?" and I did not have an answer. Usually, tax deferral is a great strategy but there are so many unknowns that I don't know what to say. Tom Modesto, CA

I have been working with various CPA firms for over 20 years. Audited financials, reviewed financials, 401K audits and tax consulting and preparation for the owners of the companies I worked for (I would never prepare the tax returns for the company that I do the books for - I want that second set of eyes on my work). The owners always care more about the tax strategies than they do about the review or the audits. The only question the owners have about the financials is usually "did we meet our covenant ratios for the bank"? I have seen good and bad and average firms, but it never fails that the owners always prefer the firms that cater to their tax needs. The current firm I am working with has our audit with one partner that I cannot stand, and she works with a junior accountant without any experience. It is awful. I tried to get them fired, but guess what? The owners love the principal of the company who personally does their business and personal tax returns. I am stuck. So I have to live with this crappy auditor and her incompetent side kick for the Financial and 401K audits. That is just the way it goes when you work for the man. You take his money to do his work, and you will like it, and you will say thank you. Tom Modesto, CA