Western CPE Blog
Breaking tax and accounting news and analysis from the experts at Western CPE.
Proposed Regs Clarify Excess Deductions
By: 
& Article at a Glance: Proposed Regs Clarify Treatment of “Excess Deductions” at the Termination of an Estate or Non-Grantor Trust Conflicting instructions abounded for 2018 Forms 1041 K1 and 1040 Schedule A. Practitioners report even software vendors were muddying the waters IRS response to the conflict between instructions, “We’re working on it” Proposed Regulations Clarify Two Items: Administration expenses and Excess deductions The proposed regulations are very favorable, so some of your client’s returns can and should be amended Section 642(h) allows beneficiaries succeeding to an estate or trust property to deduct the carryover or excess if, upon termination, …
Guest Post: Are You Ready for Reference Rate Reform?
By: Article at a Glance: FASB released a new Accounting Standards Update No. 2020-04, giving guidance in accounting for reference rate reform If LIBOR is going away, how does this impact my organization? The ASU release is not a permanent fix, though it is only effective from its March release date prospectively through December 31, 2022 The ASU also provides specific relief for hedging relationships The relief provided by the FASB may not seem like much, for some organizations, these expedients could prove to be a needed lifeline In March 2020, the FASB released a new Accounting Standards Update (ASU) …
Guest Post: Disclosure Requirements for Not-for-Profit Entities
By: Jeff Sailor, CPA
Article at a Glance:FASBA issues new accounting standard for Not-for-Profit entities that addresses contributionsThere was no specific guidance tied to contributions of non-financial assets before FASBA issued the new standardUpdate requires that non-financial asset contributions be listed as a separate line item in the statement of operationsThe new requirements will be effective for annual fiscal periods beginning after June 15, 2021The complete update details can be found at the FASB website in “Accounting Standards Update 2020-07”In case you haven’t heard, the FASB issued a new accounting standard for Not-for-Profit entities that addresses the accounting for the receipt of contributions of …
Guest Post: A Friendlier FASB for Smaller Private Companies?
Article at a Glance: Accountants’ common complaint is an overload of standards Amid the COVID environment, FASB moves to provide relief to smaller private companies Extensions were approved for private companies to reduce the gap between public and private reporting Revenue Recognition, Lease Accounting and Accounting for Credit Losses: A one-year extension was approved to continue using “old standards” CPAs can concentrate on survival and leave the challenges of the new standards to next year Private Companies Struggling with an Overload of Standards When we offer our Accounting Update courses, the most common complaint from those working with closely …
Guest Post: IRS Updates Employment Deferral FAQs
By: Article at a Glance: IRS updates deferral FAQs for employers and the self-employed. What deposits and payments of employment taxes are employers entitled to defer? How does an employer defer the employer’s share of Social Security tax? What is the period for which employers can defer deposit and payment of the employer’s Social Security tax share? Are self-employed individuals eligible to defer payment of self-employment tax imposed on net earnings from self-employment income? Will the IRS issue reminder notices to taxpayers reflecting the total amount of deferred taxes and the payment due dates? In case you hadn’t heard, the …
SBA Answers Three More Questions on PPP Loan Forgiveness
Article at a Glance: SBA and Treasury continue to address questions at their plodding pace Many banks continue to kick the can down the road while they wait for potential changes from the SBA Owner-employees with less than a 5% stake in a C or S Corp aren’t subject to the owner-employee compensation rule The household expenses of a home-based business are not eligible for forgiveness Rent payments to a related party are eligible for loan forgiveness but much depends on the Covered Period If it seems like there is a constant stream of information coming from the SBA …
New Payroll Tax Deferral
Article at a Glance: Trump’s executive orders call for a payroll tax deferral from Sep. 1 – Dec. 31, 2020 The Order suspends the collection of 6.2% Social Security tax through Dec. 31, but this is a deferral, not a forgiveness Relief only applies to those with a biweekly pre-tax income of less than $4,000 Unemployed or furloughed receive no benefit September 1st is the First Day of Payroll Tax Deferral, and the IRS is Here To Help with Notice 2020-65 On August 8, 2020, President Trump issued a Presidential Memorandum to the Department of Treasury to allow for …
IRS Releases Draft of Form 1040
Article at a Glance: The IRS released a draft of Form 1040 for the 2020 tax year The Form is not postcard-sized Virtual currency has a new position The CARES Act changed the reference point of Charitable contributions There will be a separate reconciliation schedule for Stimulus Checks – no instructions yet The amount you owe may be more complicated due to line 37(new for 2020) The IRS released the draft of the 2020 Form 1040. It still doesn’t look like the Form 1040 in “the good old days.” And it’s still not (and it not likely to ever …
News on IRS Operations During Covid-19
Article at a Glance: Remote Work & Slowdowns | During a painful tax season, we shouldered our load, helped with PPP and EIDL Loan applications. Budget Cuts & Covid-19 | The IRS experienced the same painful tax season but didn’t get all their work done. Billing Notices & 20 Million Letters | To save money, the IRS didn’t reprint notices with correct dates; instead, they “inserted” in with billing. Billing Amounts are Wrong | Try to convince your client to hold fast and not to cancel their payment and rewrite a check. Lien Releases | The IRS is processing all lien certificate applications normally …
President Trump Orders a Payroll Tax Deferral
Article at a Glance: Deferring Certain Payroll Tax Obligations paid from Sep 1, 2020 – Dec 31, 2020. The relief only applies to people working and collecting a paycheck The relief is temporary since the taxes must still be paid Major changes to the tax code fall entirely to Congress, so President Trump alone cannot waive Americans’ tax debts or enact permanent tax law changes. A payroll tax cut might create a “public relations problem” because of the potential hurt to Social Security funds On Saturday, President Trump directed the Secretary of the Treasury to defer the withholding, …
New PPP Loan Forgiveness FAQs
Article at a Glance: In consultation with Treasury, the SBA released guidance Tuesday, answering 23 frequently asked questions regarding the forgiveness of Paycheck Protection Program loans. This eTax alert focuses on one topic. What’s included in compensation for the owners of various entities? C Corporations S Corporations Self-employed Schedule C (or Schedule F) filers General Partners LLC Owners SBA has issued more than 5 million PPP loans. We helped with lots of the loan applications, and soon we will be asked to help with the forgiveness applications —we have a lot of work to do because many of the …
Guest Post: Electronic Receipt of Invoices: New Best Practice
By: Mary S. Schaeffer, MBA, has the inimitable ability to find accounts-payable-related solutions that really work—without making a major dent in the bottom line. For Western CPE, she produces self-study courses and webcasts. She has a BS in mathematics from York College (CUNY) and an MBA in finance from New York University Article at a Glance: Covid-19 has forced organizations to analyze their internal processes and develop flexible capabilities. 27% of all invoices are received in physical form using the post. As remote work increases account payable departments are finding it essential to receive invoice through electronic means. Data …
Guest Post: Two New Audit Standards Issued
By: Jeff Sailor, CPA
Jeff Sailor, CPA, received a master’s degree in accounting from the University of Florida. Jeff has managed his accounting firm in Ocala, Florida since 1984. During that time, he has also developed unique auditing approaches and auditing software. Since 1992, Jeff has been teaching accounting and auditing courses he developed to combat traditional “boring CPE.” Article at a Glance: Auditing Standards Board has just issued two new audit standards. SAS 142, Audit Evidence supersedes the existing requirements in AU-C Section 500. The new concept of audit evidence now requires the auditor to consider the “attributes” of the information being used …
Guest Post: PPP Loan Forgiveness Problems
By: Kurt Oestriecher
Article at a Glance: Some programs, particularly the PPP Loan program, continue to have problems. Original concept of PPP Loan was simple. Congress considered the concept too simple, and added a provision period. The SBA issued conflicting guidance in the Interim Final Rules and subsequent revisions. Borrowers and banks will have to rely heavily on the CPA profession to guide them through the forgiveness process. Kurt G. Oestriecher is the partner in charge of accounting and auditing services with Oestriecher & Company of Alexandria, Louisiana, and has been with the firm since graduating from Northeast Louisiana University in 1986. …
Guest Post: Major Changes to the CPA Exam
Article at a Glance: New threats to CPA licensing posed in 2020 legislative year. Possible CPA Licensure Model. CPA Exam moves to ‘continuous testing’ model. Proposed CPA Exam Material. No plan for changes to 16-hour, the four-section structure of the exam. Rod Redding received his Ph.D. from Penn State University after working with Price Waterhouse and IBM. Currently, he presents seminars and webcasts and prepares self-study courses for Western CPE. A few things related to the CPA profession: threats to licensing, possible changes to the CPA licensing model, continuous CPA exam testing and how the CPA exam content might change New threats to CPA …
Another Change to the PPP Loan
Article at a Glance: 48 changes to the Paycheck Protection Program (PPP) Loan provisions in the CARES Act. PPP Loan provision expired on June 30, 2020. SBA reported that the second round of funding resulted in an average loan size of $113,000. The Paycheck Protection Plan Extension Act. 3.7 million (85%) of loans approved by SBA are $150,000 or less. There have been 48 changes to the Paycheck Protection Program (PPP) Loan provision in the CARES Act. The changes included: The Paycheck Protection Program Flexibility Act, IRS FAQs, Interim Final Rules, Revised Interim Final Rules, and new application forms …
More Tax News from the IRS
Article at a Glance: Economic Impact Payment Notice. Early bird RMDs. COVID-19 IRA retirement plan withdrawals. Qualified Opportunity Fund investment delay. The IRS has been busy with lots of news items. Here are a few items of interest for you and your clients. Economic Impact Payment notice. Remind your clients to keep Notice 1444 — “Your Economic Impact Payment”. Your clients may not know this is an important document. They will need the Notice if they qualify for a larger Impact Payment when they file their 2020 tax return. The client may be entitled to a bit more rebate …
Tax News Galore
Article at a Glance:June 30, 2020 Deadline.20 million backlogged notices.Millions of unopened pieces of mail.IRS will pay interest on 2019 refunds issued after April 15. In the last week, the IRS has been busy with “news” for you and your clients: June 30, 2020 Deadline. Only a few days are left.There is still money left for a Paycheck Protection Program Loan, but the PPP loan program shuts down on June 30, 2020. It’s a rush, but maybe the struggling small business person can get funds to keep afloat for a few more months. If your client can’t make the June 30th deadline, …
PPP Loans Forgiveness — Applications, Clarifications, and Examples
Article at a Glance:PPP Loan Forgiveness Clarified in a Revised Interim Final RuleSafe Harbor Added for Reductions in FTEsMaturity Date of Loan ExtendedDeferral Period for Borrower Payments ExtendedEmployer Payroll Tax Deferral ExpandedPPP Loans Forgiveness — Applications, Clarifications, and Examples Forgiveness Applications Revised and Simplified SBA released a new EZ version of the forgiveness application (Form 3508EZ). The EZ application requires fewer calculations and less documentation and will ease the paperwork for small business owners and the practitioners that help them. The EZ can be used by borrowers who: Are self-employed and have no employees; OR Did not reduce the salaries …
Guest Post: A Quick Look at the Sections of the AICPA Auditing Standards Board Auditor’s Report
Dr. Rod Redding received his PhD from Penn State University after working with Price Waterhouse and IBM. Presently, he presents seminars and webcasts and prepares self-study courses for Western CPE. To read more about Rod or see his coursework, check here . In May 2019, the Auditing Standards Board (ASB) issued SAS 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements. Over 2019 and 2020, the ASB issued SAS 135 – SAS 141 which all relate to the Auditor’s Report and are designed to go with SAS 134 as a suite of standards. The standards are …