Tax Monitor

SBA’s Twenty-Second IFR Addresses PPP guidance for Commercial Fishing Boat Owners and Crewmembers

June 26, 2020

Last night the SBA issued its 22nd IFR addressing the treatment of PPP forgiveness for commercial fishing boat owners and crewmembers working on the boats that are considered independent contractors or self-employed for certain tax purposes under 26 U.S.C. 3121(b)(20) of the Internal Revenue Code. If the boat owner included payments to crewmembers in a PPP loan, the boat owner can treat the…

SBA Refines Ineligibility Standards for Felonies

June 25, 2020

The Small Business Administration (SBA) has continued to refine the nature of a business owner’s criminal history that will make the business ineligible for a loan under the Paycheck Protection Program (PPP). On June 24, 2020, the SBA issued its 21st Interim Final Rule related to the PPP program: Business Loan Program Temporary Changes; Paycheck Protection Program-Additional Eligibility Revisions…

SBA updates PPP forgiveness and loan review rules

June 24, 2020

As we approach the June 30, 2020 deadline for applying for a loan under the Paycheck Protection Program (PPP) the regulatory focus is shifting from eligibility issues to loan forgiveness and loan review. The latest interim final rule from the Small Business Administration (SBA) revises previously issued rules to reflect program changes required by statute and provide additional direction to…

TAKE AWAYS FROM A RECENTLY FILED LAWSUIT AGAINST A 401(k) POOLED PLAN TRUSTEE

June 23, 2020

A recent lawsuit filed in Rhode Island against a Trustee demonstrates the issues faced by plan Administrators in responding to extraordinary circumstances. Our goal is to arm you with the best defense possible when similar issues arise in your plan Administration.

The Rhode Island Lawsuit

Plaintiffs filed a lawsuit in response to an Administrator adopting an alternate valuation date in response to…

SBA’s Nineteenth IFR amends PPP guidance for self-employed borrowers 

June 18, 2020

The Paycheck Protection Program Flexibility Act (Flexibility Act) modified the Paycheck Protection Program (PPP) and associated forgiveness established by the CARES Act. The modifications expanded the amount of potentially forgivable payroll expense per employee from $15,385 to $46,154. By interim final rule, the Small Business Administration (SBA) has limited the maximum forgivable owner…

SBA softens PPP eligibility requirement for non-dishonesty felonies and issues a revised application

June 15, 2020

The Small Business Administration (SBA) has softened the qualified eligibility limits for borrowers with owners with charges or convictions of a felony. This change in eligibility requirements accompanies the issuance of a revised PPP application that complies with the Paycheck Protection Program Flexibility Act (Act).

On Friday, June 12, 2020, SBA published its eighteenth interim final rule…

Initial regulatory interpretation of the Flexibility Act changes to the PPP

June 11, 2020

The Small Business Administration (SBA) began its interpretation of the Paycheck Protection Program Flexibility Act of 2020 (Flexibility Act) with the issuance of its seventeenth interim final rule related to the Paycheck Protection Program (PPP). The Flexibility Act includes significant changes to the PPP and loan forgiveness provisions of the CARES Act. On June 10, 2020 the SBA published…

Remote Signature - IRS Provides Temporary Relief via Notice 2020-42

June 8, 2020

In order to assist in processing of plan distributions and loans (whether or not COVID-19 related), the IRS is providing temporary administrative relief by allowing flexibility for remote signatures from retirement plan participants and beneficiaries and spouses. This change relates to the existing requirement that a plan representative or a notary public must physically witness the signatures of…

Telephone Cooperatives May Be Eligible For PPP Loans

June 8, 2020

Telephone cooperatives that are exempt from federal income taxation under section 501(c)(12) of the Internal Revenue Code may be eligible for PPP loans if they meet the sized standards and other eligibility requirements of the PPP. On Friday, June 5, 2020 the Small Business Administration (SBA) Issued its Sixteenth interim final rule: “Business Loan Program Temporary Changes; Paycheck Protection…

Congress Approves Much Needed Changes To The PPP

June 4, 2020

Last night the Senate passed House Bill 7010, the Paycheck Protection Program Flexibility Act (the "Act"), which for the most part provides substantial relief to recipients of loans under the Paycheck Protection Program (PPP). The President is expected to sign the Act into law. The Act changes the PPP and the forgiveness provisions of the CARES Act.

Summary

Big take-aways:

• A 24-week option to expend…

SBA PPP Loan Reviews Pose Risks For Both Borrowers and Lenders

May 28, 2020

It is well known that the quality of a loan portfolio is dependent on the quality of the loan files. That is certainly true of loan portfolios created under the Paycheck Protection Program (PPP). Documentation will be the key to ensuring positive outcomes for both borrowers and lenders.

The Small Business Administration (SBA) has indicated its intention to review many loans made under the PPP.…

New PPP Guidance Continues Promotion of Forgiveness

May 27, 2020

Recent guidance from the Treasury Department (Treasury) and the Small Business Administration (SBA) continues to promote an inclusive definition of forgivable expenses. On May 22, 2020, Treasury published its fourteenth interim final rule related to the Paycheck Protection Program (PPP): “Business Loan Program Temporary Changes; Paycheck Protection Program-Requirements-Loan Forgiveness”…