COVID-19 Financial Relief, Education, Illinois, Tips

Illinois Business Interruption Grant, Round 2, Open Now — FREE WEBINAR Sept 22

September 21, 2020 Nancy McClelland Leave a comment

Register by visiting www.chicago.gov/businesseducation

The State of Illinois has created the Business Interruption Grants (BIG) program for small businesses in Illinois suffering losses as a result of the ongoing COVID-19 pandemic, as well as communities impacted by the recent civil unrest. Applications for a second round of funding are now live. A total of $220 million will be made available for small businesses of all types in Illinois.

The Chicago BACP has put together a free webinar on September 22, 2020 that brings together the following partners to provide an overview of the program and how to apply.
– Ciere Boatright, Chicago Neighborhood Initiatives
– Brad McConnell, Accion Serving Illinois and Indiana
– Marcus Yancey, Local Initiatives Support Corporation Chicago
Register by visiting www.chicago.gov/businesseducation today.

The second wave of funds includes the following provisions to ensure a wide distribution of funds geographically and across business type:

Heavily Impacted Industries – $60 million for heavily distressed industries, such as movie theatres, performing arts venues, concert venues, indoor recreation, amusement parks, and more.
Disproportionately Impacted Areas – $70 million set aside for DIAs, defined by zip codes identified by the General Assembly for communities that are most economically distressed and vulnerable to COVID-19.
Downstate Communities– DCEO has committed to ensuring that at least half of all remaining funds, totaling more than $100 million, are reserved for businesses in downstate and rural communities of Illinois.
Priority Businesses– Apart from the $60 million for heavily impacted industries, applications from the following types of businesses will be prioritized for review for remaining funds: businesses directly affected by regional mitigations implemented by the state or local governments, independently owned retail, tourism- and hospitality-related industries including accommodations, and more.
Agriculture – $5 million of the remainder of funds will be set aside for livestock production disruptions.
Grants and Loan Forgiveness for Illinois Small Business Emergency Loan recipients – As authorized by the General Assembly, DCEO will offer grants for businesses that have incurred eligible costs to offset loans received under the Illinois Small Business Emergency Loan program.

Businesses outside the categories listed above are also eligible to apply and receive funding under the program but may be reviewed later than priority businesses. All businesses will receive a decision on their grant application within four to six weeks of application submission. More information here —
https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/C19DisadvantagedBusGrants.aspx

I am getting a lot of questions from recipients of Round 1 grants about what types of costs are considered eligible for this program. The Certification & Requirements pdf states the following.

ELIGIBLE COSTS
“The subrecipient will use the proceeds of the subaward supported by the Program exclusively for costs and losses incurred due to the business interruption or other adverse conditions caused by the Coronavirus Disease 2019 (COVID-19) pandemic. For purposes of this Program, costs incurred during a business interruption may be classified as a cost related to COVID-19. Grant proceeds may be used to reimburse costs and losses such as inventory, equipment (including Personal Protective Equipment and other supplies to promote health and safety), compensation (including salaries, wages, tips, paid leave, and group healthcare benefits), rent, technology to facilitate e-commerce, professional services procured (including the design and construction of environments necessary to promote physical and social distancing and cleaning and disinfecting services) and other costs of operation in accordance with the applicable administrative rules or the policy directives of the grantor that was incurred during the period that begins on March 1, 2020, and ends on December 30, 2020. All spending related to this program must be reimbursable by the Federal Coronavirus Relief Fund, as prescribed by 601(a) of the Social Security Act and added by section 5001 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act including all subsequent federal guidance. Expenses that have been or will be reimbursed under any other federal program are not eligible for reimbursement through the proceeds of this subaward.“

Please pass the word along about this grant to the neediest of the Illinois businesses you know.

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.

IRS

IRS Labor Day Weekend Planned System Outage

September 4, 2020 Nancy McClelland 2 Comments

From the IRS “e-News for Tax Professionals” comes a reminder that even though we are scrambling after an elongated tax season to get our S-Corp and Partnership returns filed by the September 15th deadline, this won’t be the weekend to e-file them.

COVID-19 Financial Relief, Education, Software, Tips

New AICPA FREE Searchable Index For PPP Guidance

September 3, 2020 Nancy McClelland Leave a comment

Screenshot from 9/3/20 AICPA Town Hall of excerpt of new PPP rule index

The AICPA has come out with yet another amazing, free tool to help business owners administer PPP loans and accountants to advise them.

If you’ve been playing along, you know that the Small Business Administration (SBA)’s troubled and challenging Paycheck Protection Program (PPP) has had a ridiculous number of clarifications, FAQs, Interim Final Rules (IFR), and other guidance. Figuring out which piece of info is hidden in which document is nearly impossible.

The American Institute of CPAs (AICPA) felt the same way. So the organization that brought you the [free] PPP Forgiveness Calculator and [also-free] PPP Online Forgiveness Tool, now brings you a (FREE) lovely spreadsheet with (so far) 170 searchable questions about the PPP, and indicates the date and type of guidance, and links to where to find it.

From the AICPA:

The Paycheck Protection Program (PPP), under Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides small businesses with forgivable loans. Administered through the Small Business Administration (SBA), the PPP loan proceeds are to be expended on payroll, rent, mortgage payments, or utilities. The SBA, in conjunction with the Treasury, have released Interim Financial Rules (IFRs) and Frequently Asked Questions (FAQs) to provide guidance.

This searchable index allows users to easily find guidance on the PPP loan application, eligibility, allowable use of funds, loan forgiveness, maturity date, and more.

COVID-19 Financial Relief, Illinois

Illinois Business Interruption Grant Award List Released

August 31, 2020 Nancy McClelland Leave a comment

Gov. JB Pritzker announces Business Interruption Grant (BIG) Awards

The first round of the Illinois Business Interruption Grant (BIG) program awards have been announced, and the list is available to the public, here.

(Note: I noticed when reviewing the list that in the Chicago section, it runs alphabetically, but then re-starts with another round of A-Z. Therefore one needs to look in both sections to see all the Chicago recipients.)

BIG is a program through which Illinois awards grants to a diverse group of small businesses, as well as business communities hit hardest by COVID-19 related closures. The grants are for either $10,000 or $20,000 and a total of $46 million have been awarded so far. They are intended to be used to help businesses with working capital expenses (including payroll, rent, utilities, and equipment, as well as other unexpected costs to mitigate the impact of the pandemic, such as PPE, training, and new technology).

“Business categories identified in the first round include small businesses in industries that continue to experience economic hardship due to public concerns for health and safety and in areas that sustained setbacks due to property damage and closures as a result of recent civil unrest.”

“BIG round 1 grants span a diverse geography, as well as business type – with more than 50 percent of grant recipients reporting they are minority-owned. This breakdown includes 14 percent Black business owners, 25 percent Asian-owned, and 11 percent Latinx-owned. Additionally, more than 600 grants totaling $10 million for downstate businesses. To ensure small businesses were given a priority, grantees were required to prove annual revenues of $3 million or lower.”

“More than 5,000 businesses applied for funding, with grantees selected via random lottery. To ensure reviews were conducted with an objective, equitable lens and to maximize the turnaround time on application reviews, DCEO partnered with several community-based grant administration partners, including Accion, Chicago Urban League, Women’s Business Development Center, The Chicago Community Loan Fund, Somercor and Chicago Neighborhood Initiatives.”

More information on the program and the first round of awards can be found here, and again, the list of recipients is here.

COVID-19 Financial Relief, Illinois, Tips

Illinois Grants for Mortgage & Rental Relief Closing Soon

August 23, 2020 Nancy McClelland Leave a comment

Screenshot from the Illinois Housing Development Authority website pop-up

Please share widely — especially if you know of anyone who might be in need of rent- or mortgage-assistance. There are only a few days left to apply — go to https://www.ihda.org/ and follow the links accordingly.

Chicago Housing Assistance Portal: This portal can route you to the most appropriate of the four housing assistance programs available: DFSS Rental Assistance Program; DOH COVID-19 Housing Assistance Grants; DOH Mortgage Assistance Program; or the Illinois Housing Development Authority Statewide Housing Assistance [click here]

And here is a list of places that can potentially assist with applications, courtesy of State Rep. Will Guzzardi.

COVID-19 Financial Relief, Illinois, Tips

Illinois – No More Snail Mail for Unemployment Claim Notifications

August 19, 2020 Nancy McClelland Leave a comment

Big news from the Illinois Department of Employment Security (IDES).

Two big pieces of info:

Employers will no longer receive paper copies of snail mail notices — this may not sound like a big deal, but it’s huge. Employers only have 10 days to contest an employee’s potentially false unemployment claim. Often quite a few of these days have unfortunately already passed by the time the snail mail notice arrives. So although in theory this is a good move, it requires employers to regularly check their MyTaxIllinois account — potentially every few days, since there’s no other way to know when a former employee (who may have departed months ago) has made a claim.
For now, #1 above isn’t that big a deal, inasmuch as for the meanwhile, IDES is going to presume that all claims are COVID-19 pandemic-related, unless the employer says otherwise. And as such, the employer unemployment tax rate will not be increased based on these charges. But when they decide to go back to letting unemployment claims affect the employer’s experience rating, this is going to be a huge problem, as most employers will not notice the claims in time to respond to those that should be challenged.

I see an opportunity for a business that monitors each employer’s MyTaxIllinois account for claims submitted, and alerts the employer immediately in case they would like to challenge the claim. Let me know in the comments if you find anyone offering this service. In the meantime, employers should actively check the IDES section of their account on MyTaxIllinois.

IRS, Tips

IRS Sending Overdue Notices For Checks Sitting In Its Unopened Mail

August 15, 2020 Nancy McClelland 1 Comment

A new notice appeared on the IRS website late on August 13th:

Pending Check Payments and Payment Notices: If a taxpayer mailed a check (either with or without a tax return), it may still be unopened in the backlog of mail the IRS is processing due to COVID-19. Any payments will be posted as the date we received them rather than the date the agency processed them. To avoid penalties and interest, taxpayers should not cancel their checks and should ensure funds continue to be available so the IRS can process them. To provide fair and equitable treatment, the IRS is 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. However, interest and penalties may still apply. Due to high call volumes, the IRS suggests waiting to contact the agency about any unprocessed paper payments still pending.

Claudia Hill, EA (always one of my favorite speakers at the annual IRS Tax Forum), wrote an excellent and somewhat scathing article in Forbes regarding the current disaster we as CPAs are dealing with on behalf of our clients — the IRS is many months behind in opening its mail, yet their automated system for sending out scary letters to taxpayers for unpaid taxes is back up-and-running.

Reports Claudia, having spoken to a “a hard-working, somewhat overwhelmed IRS customer service representative”:

… while IRS automated computer billings had resumed, any mail received at the Service Center between March 13 and June 30 was likely still unopened in the rooms of boxes containing mail that had arrived during the Covid-related shut-down. This included tax returns and payments directed to Service Center addresses. The Service Centers received about a million pieces of mail per week during that time. No one was there to open it.

IRS billing process is consistent; it is machine programmed. After the first letter goes out, approximately four weeks later if no money is deemed received, a second notice goes out. Each letter becomes sterner. By the third letter, IRS is reminding taxpayers of their rights to lien, levy and seize in the event of non-payment.

As she rightly points out, ignoring IRS notices can lead to serious problems — because their system is automated, a human being must intervene in order to (as I’ve always described it to clients) throw a cog in the wheel to stop it from churning.

The problem is exacerbated by the fact that these days, getting an IRS representative on the phone is rather difficult. If you are in this situation, I recommend calling the phone number on your notice during non-peak hours (7-10 am & 6-7 pm), Tue-Thu (if you do not have a number on your notice — the main one is 1-800-829-1040). Be ready to turn on your phone’s speaker and keep yourself busy with a project in the meantime. Or, as was recommended by John Sheeley, EA in his weekly tax update class yesterday, use an app that waits on hold for you and calls you back when a rep comes on the line.

Claudia offers these suggestions for the call:
1) Get your documentation ready:
– copy of the certified mail receipt
– copy of your checkbook showing you wrote the check
– copy of your bank statement showing it has not been cashed
2) If you are told about the mail delay, ask them to place a “stay-up” on your account for as long as they believe it will take to open the mail and process millions of pieces of correspondence and checks.

And good luck!

Education, Illinois

Chicago’s Labor Laws: What You Need To Know For Your Business – FREE Webinar 8/19/20

August 14, 2020 Nancy McClelland Leave a comment

Upcoming FREE Chicago Business Affairs & Consumer Protection webinar on labor laws! – Wednesday, 8/19 Webinar from 3:00-4:30 PM

Chicago’s Labor Laws: What You Need To Know For Your Business – Presented by BACP’s Director of Office of Labor Standards

Attend this webinar to learn about the Chicago Labor Laws that you need to comply with in order to run your business. You will learn about the Chicago Minimum Wage, Paid Sick Leave, Fair Workweek and Anti-Retaliation Laws and how these affect your business.

COVID-19 Financial Relief, Education, Tips

EIDL & PPP Interaction Guidance

August 14, 2020 Nancy McClelland Leave a comment

The EIDL has two portions: an advance grant, and a 30-year loan.

The SBA provided guidance recently on the interaction of PPP loan forgiveness with advances on the Economic Injury Disaster Loans (EIDL), in the form of adding three Q&As to its August 11th FAQs.

Many of my clients, as well as countless other small businesses, applied for loans under both the PPP and EIDL programs and received them. For EIDL, they could receive 1) an advance grant (generally measured at $1000 per employee), which in theory was automatically forgiven, and 2) a 30-year working capital loan at an interest rate of 3.75% (2.75% for nonprofits). Applicants could apply for or receive either the advance grant, the loan, or both.

Though the CARES Act does not call for it, and the SBA did not expressly state it, the AICPA began reporting some months ago (presumably based on information received from their regular meetings with Treasury) that the EIDL advance grant would have to be subtracted from PPP forgiveness. There was much disagreement in the CPA world as to whether or not this was indeed the case, as the SBA forgiveness application could be interpreted either way.

However, with these new FAQs, the SBA has put an end to that debate, confirming the AICPA’s position that the EIDL advance grants must be subtracted from PPP forgiveness.

The good news here is that at least these will, in effect, be converted into the PPP 1%-interest loans, rather than the 3.75% EIDL. The bad news is that the PPP loan term is only 2- or 5-years (depending on when the loan was signed), rather than the 30-year EIDL.

Therefore, if you have a large EIDL advance grant (at one point these were capped at $10,000, but there are some out there for more than this amount), and you will be challenged by paying it back, take a look at your PPP loan term. If it is 2 years (for loans prior to June 5), then contact your PPP lender to extend the PPP loan to a 5-year period.

This would be particularly important if the EIDL advance grant was larger than your PPP loan, as in these cases there will be no forgiveness.

COVID-19 Financial Relief, Tips

SBA Guidance On Appealing PPP Forgiveness Rejections – Lawyers Only, Please

August 14, 2020 Nancy McClelland 2 Comments

SBA gives borrowers a second chance at forgiveness.

Reported in yesterday afternoon’s issue of Accounting Today, “the U.S. Small Business Administration (SBA) has posted rules about how businesses who have been turned down for forgiveness of their Paycheck Protection Program loans can appeal the decision, and about how forgivable PPP loans interact with the SBA’s Economic Injury Disaster Loans.”

The SBA’s Office of Hearings and Appeals has been charged with PPP loan forgiveness denials, which means CPAs will not be permitted to represent the clients they have helped through the PPP process.

According to Accounting Today: “‘The process is a formal legal process, with representation of the borrower limited to attorneys,’ noted Ed Zollars, a partner in the CPA firm of Thomas, Zollars & Lynch, in a blog post Wednesday for Kaplan Financial Education about the new rules. ‘The special status granted to CPAs to practice before the IRS does not carry over to practice before the Small Business Administration.'”

The interim final rules on this matter take effect immediately, though comments are still being accepted.

“Business that appeal the loan forgiveness denial will need to have a copy of the loan review decision that’s being appealed, a statement about why the decision was erroneous, the relief that’s being sought, signed copies of payroll tax filings filed with the IRS and the state, as well as various federal tax returns and schedules… the SBA also wants the name, address, phone number, email address and signature of the appellant or attorney. The maximum length of the appeal petition should be 20 pages, not including any attachments.”

The Dancing Accountant