Monthly Archives: July 2020

COVID-19 Financial Relief, IRS, Tips

Filing Form 7200? Use IRS Dedicated Fax Line

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From the IRS e-News for Small Business Issue 2020-13 today, a note encouraging businesses to use a new fax line to file Form 7200. The IRS still is ramping up staff and catching up departments post-quarantine, so in order to get your advance payment as quickly as possible, please follow their instructions and use the dedicated fax line.

(If you are working with a payroll company who is filing Form 7200 for you, confirm they are taking care of it — do not simply assume. I’ve already come across two companies so far who won’t do it. Time to switch payroll companies, in my opinion.)

IRS Form 7200 fax line:
Employers use Form 7200 to request an advance payment of the tax credits for qualified sick and qualified family leave wages and the employee retention credit. The employer tax credits for qualified sick leave wages and qualified family leave wages apply to those wages paid from April 1, 2020, to December 31, 2020.

Businesses should fax the completed form to 855-248-0552.

Due to scheduled maintenance, the 7200 fax line will be unavailable from August 7 at 10 p.m. to August 8 at 7 a.m. ET.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Illinois, Tips

Reminder: Cook County Property Tax Payment Deadline Extended to Oct 1

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A lot of clients have been reaching out about how to handle the Cook County, Illinois property tax bills that began arriving in mailboxes a few weeks ago — so I just wanted to issue a reminder: although the second installment is technically due August 3, property owners can take until October 1 to pay without any interest charge.

Cook County Treasurer Maria Pappas suggested that property owners should go ahead start making partial payments now — to avoid one big payment on October 1. Any balance due after that date will be charged 1.5 percent per month, as required by state law.

To download a copy of your tax bill or to make a payment, visit www.cookcountytreasurer.com. There is no fee if you pay from your bank account:

  1. Select the blue box labeled “Pay Online for Free”
  2. Search by property address or enter your Property Index Number (PIN) and click “Continue.

You also can download a copy of your bill, check and update key information about your property, such as mailing address or property tax exemptions, and more.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Education, Site News, Tips

PPP Loans Under $150K May Be Automatically Forgiven

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Secretary Mnuchin Speaks to Reporters

On Friday afternoon, July 17, Secretary of the Treasury Mnuchin announced that he would consider recommending to both the IRS and SBA that all PPP loans below a certain amount be automatically forgiven. The PPP loan cap mentioned in the discussion was for all loans under $150,000 (though various lobbying groups have floated other amounts). Loans at this level and below account for 86% of all PPP loans — but only 26% of the funds.

This would allow banks and the SBA to concentrate their reviews on the loans above $150,000 — only 14% of the loans — which make up a whopping 74% of the funds. (Among these large borrowers are the many chains, billionaires, and public companies that arguably were not the “small businesses” the fund was meant to help.)

If this recommendation is made, and if accepted, presumably that would mean that Forms 3508-EZ or 3508 would not have to be filed by the borrower with the PPP lender. Mnuchin did mention that some fraud precaution would need to be involved. We’ll have to wait to learn more.

I’ve been put off by how many of my colleagues have been mining these applications for additional fees (and bragging about it), especially when their small-business clients desperately need all the funds they can get to keep their businesses running. So not only would this move by Treasury aid small business owners, who are already overwhelmed with keeping afloat during a pandemic; as well as lenders, who would be able to spend resources more effectively in examining large loans; but it also would put the brakes on the predatory behaviors of “trusted advisors”.

In light of this exciting new development/ possibility, and the fact that we are still waiting for an SBA/Treasury FAQ — which has been promised for weeks on-end at this point — I have decided to postpone all client meetings and webinars on the topic, to allow for the respective government agencies to provide additional information.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Illinois

Illinois Deferred Sales Taxes From Feb-Apr: Reminder Of Due Dates

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I attended the Crain’s Chicago Business Webcast the other day featuring “State of the Illinois Budget with Comptroller Mendoza“, and although I was generally pleased with her handle on the state’s financial situation and her ability to explain it to the audience, I was disappointed that the mediator did not take my question, which was: what are small businesses supposed to do without more state support, especially where tax payments are concerned?

We all understand that Illinois governor has inherited a major fiscal problem — and how it got this way is a complex matter outside the scope of this blog post. But despite this, in my opinion, there simply need to be more forgiveness and deferral options for state sales and income taxes due from small businesses.

For example, the federal government moved the deadline for both first- and second-quarter estimated quarterly taxes to July 15th; but the state of Illinois left them on their original dates (April 15 and June 15). As a result, many self-employed taxpayers and small business owners ended up accidentally paying them late.

And in March, the Illinois Department of Revenue offered short-term relief for late sales tax payments to all registered Illinois retailers operating eating and drinking establishments. But the problem was that the February, March and April sales taxes that were deferred were due in May, June, July and August (along with the sales taxes from the current month). In case you hadn’t noticed… those businesses are in more dire financial straits now than they were back in March.

So let this post serve as a reminder that Payment #3 (of four) of the February-April 2020 deferred sales taxes is due on July 20th. But also let it be encouragement to contact your Illinois state senators and representatives, the Department of Revenue, Governor Pritzker’s office, and Comptroller Mendoza’s office to request leniency where penalties and interest are concerned, and to ask that they consider changing the due dates and waiving all related fees for businesses with balances due of less than $10,000. Small restaurants and bars are no better off now than they were before this pandemic began, and if we want to help them weather the storm, we need the state to help.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.

COVID-19 Financial Relief, Site News, Tips

Paycheck Protection Program Application Deadline Extended Through Aug 8

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UPDATE 7/4: The PPP Extension has been signed into law.

UPDATE 7/1: It has passed the House as well and is expected to be signed by the President today.

Total shock and surprise… out of nowhere, the Senate unanimously passed a five-week extension to the Paycheck Protection Program application deadline, just a few hours before it was set to expire.

According to USA Today:

Sen. Ben Cardin, D-Md., the top Democrat on the Small Business Committee, said on the floor that senators picked August 8th because that’s the end of the Senate’s next work period and lawmakers are hoping to pass the next relief package by then.

Additionally, Sen. Susan Collins, R-Maine, who helped negotiate the initial small business portions of the March coronavirus relief legislation, said that the extension would make certain we “don’t see an interruption in this program” while a fifth relief bill is being negotiated in Congress. 

The unanimous agreement Tuesday night was unexpected, as lawmakers have clashed over issues regarding the program, including legislation regarding how to possibly redirect the unused $130 billion.

The deadline had recently been extended for a few specific borrowers who challenged some of the requirements in court and won — but this ruling only applied to those specific instances. However, their challenge pointed out some unfair restrictions in the PPP application requirements regarding criminal records that have since been remedied (though none of the online applications I have seen have incorporated the new rules yet). Given the timing of the recent guidance, there were certainly many would-be applicants that would not have been able to apply, and hopefully this extension will help.

There also is simply a huge amount of money left — $130 billion. There was so much confusion and fear about applying and getting loan forgiveness that the funds didn’t make it to many of the intended recipients; many never even applied. For example, I helped three folks this week who thought the program “didn’t apply to them”. Now that the rules are easier to follow, make more sense, require less work, and are clearer, hopefully small business owners will come out of the woodwork and get some much-needed assistance.

The House is expected to pass the measure and the President is expected to sign it. The bill passed in the Senate by unanimous consent.

If this or any other posts on the website were useful to you, and your financial situation permits it, please consider contributing to my tip jar. This allows me to continue to provide free accounting resources to small businesses who do not have the funds available to hire a CPA.