Tax Warrior Chronicles

Cash Flow Forecasting and Finding Liquidity During the Pandemic

Posted on Thu, Oct 22, 2020

As leaders across the world work continuously to combat the ongoing COVID-19 pandemic, so must business owners of all sizes, industries, and geographic locations. Throughout 2020, the business world and global economy has swiftly transitioned from a period of growth to that of great operational and informational uncertainty.

 

For many business owners and organizational leaders, cash flow forecasting is a tool used to understand cash flexibility, evaluate liquidity, and identify risks.

 

Cash flow models are ​useful in the current economic environment. Having a cash burn analysis allows businesses to understand worst-case-scenario outcomes and plan strategically. Some examples of ​what can

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Guidance on Payroll Tax Deferral Creates More Questions Than Answers

Posted on Mon, Aug 31, 2020

Late on Friday, August 28, 2020, the IRS issued Notice 2020-65 providing highly anticipated guidance addressing the Presidential Executive Order regarding the deferral of certain payroll tax obligations. Unfortunately, the notice failed to address the most basic issues raised by the Executive Order. Today we will discuss what we know, what questions remain, and practical considerations for employers. Implementation of the deferral begins September 1, 2020 – yes, tomorrow.

 

Background

On August 8, 2020, the President issued an Executive Order via a memorandum to the Secretary of the Treasury directing him to use his authority to postpone the collection of tax during national disasters to

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State Nexus and Tax Issues Resulting from a Remote Workforce

Posted on Thu, Aug 06, 2020

Working from home, once a perk at many companies, has become the norm for employees across the country. COVID-19 has forced businesses to quickly allow their employees to work remotely. The state tax implications of having a remote workforce should not be overlooked, especially as many businesses transition from temporary teleworking policies to permanent ones. Today’s blog will focus on a state tax issue many taxpayers will need to focus on as we enter the second half of 2020: nexus.

 

“Nexus” is a term used to describe when a taxpayer has a presence in a state. Once nexus is created with a state, the taxpayer will likely need to register to do business in that state and will be subject to

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IRS Expands the Definition of Coronavirus-Related Distributions

Posted on Wed, Jul 22, 2020

The Treasury Department offered easier access to retirement savings in March 2020 as the economic hardships resulting from the COVID-19 pandemic became a forgone conclusion.  Three months later, The IRS has expanded eligibility for coronavirus related distributions and provided further insight into how these new rules should be applied in Notice 2020-50.

 

Certain provisions in the CARES Act were enacted to reduce the tax burden on withdrawals from certain qualified retirement plans. If a withdrawal is considered a “coronavirus-related” distribution, the CARES Act extended the time to pay the resulting taxes or to recontribute the distributions back to the qualified plan, while widening

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IRS Grants Extensive Relief to 2020 RMD Recipients

Posted on Mon, Jun 29, 2020

If you received a Required Minimum Distribution (RMD) in 2020, you should take careful note of guidance contained in the recently issued IRS Notice 2020-51 regarding the CARES Act’s waiver of 2020 RMDs and a taxpayer’s ability to rollover such distributions.

 

Prior to the CARES Act, distributions eligible to be rolled over to a retirement plan (including an IRA) within 60 days from the date of receipt, excluded:

  • Required Minimum Distributions (RMDs),
  • Distributions that were part of a series of substantially equal period payments made over a specified period, and
  • Distributions made on account of a hardship experienced by an employee.

Other exclusions form eligible distributions for the

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PPP Update #14 – You Can Apply for Forgiveness Early, but Buyer Beware

Posted on Thu, Jun 25, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7,#8,#9,#10, #11, #12,#13,#14, #15

 

The Treasury continues to rewrite guidance based upon the changes passed within the Paycheck Protection Program Flexibility Act (PPPFA). Overnight on Monday, June 22, the Treasury released the 20th Interim Final Rule (IFR). There are no surprises on what to expect with the 20th IFR: some clarifications, a few new things, and you guessed it, more unanswered questions. Today, we will focus on a significant new item and some of the clarifications.

 

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PPP Update #13 – Revised Forgiveness Guidance: New IFRs and Applications

Posted on Thu, Jun 18, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates#1, #2#3#4#5#6#7,#8,#9,#10, #11, #12,#13,#14, #15

 

Since our last blog, the Treasury issued two additional Interim Final Rules (the 18th and 19th), revised the original loan forgiveness application for changes made by the Paycheck Protection Flexibility Act (PPFA), and issued a new EZ loan forgiveness application. If you are up to date with our blogs, we are starting to compare the Paycheck Protection Program (PPP) to extra-innings in the longest baseball game ever recorded. It is now inning 19,

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PPP Update #12 – Revised Guidance for PPP Forgiveness Begins; More Expected to Follow

Posted on Thu, Jun 11, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates#1, #2#3#4#5#6#7,#8,#9,#10, #11, #12,#13,#14, #15

 

The Paycheck Protection Program (PPP) could be compared to the longest baseball game in history (we really miss sports, humor us here).  That Triple-A International League game ended with a 3-2 score, lasted 33 innings, and clocked 8 hours and 25 minutes of playing time.  As we enter the twelfth inning on this subject, complete and clear guidance remains wanting.  Last at bat we discussed the passage of the Paycheck Protection Program Flexibility

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IRS Grants Broad COVID-19 Relief to Qualified Opportunity Funds and Their Investors

Posted on Tue, Jun 09, 2020

Late last week, the IRS released Notice 2020-39 providing relief for Qualified Opportunity Funds (QOFs) and their investors in response to COVID-19, and updated the Qualified Opportunity Zones frequently asked questions on its website to reflect the recent changes.  With the June 30th investment standard testing date fast approaching for many QOFs, this presents welcome relief and flexibility to QOFs and their investors.

 

It is worth noting that none of the relief provisions under Notice 2020-39 require QOFs or their investors to certify they have been adversely impacted by the virus.  In addition, the relief provisions do not require any filing or formal extension request and will

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June 15 Estimated Tax Due Dates Still Valid in Certain States

Posted on Tue, Jun 09, 2020

In response to the COVID-19 pandemic nearly every taxing authority (federal, state, and local) granted taxpayers an automatic extension of time to file and/or pay 2019 taxes.  This has made the 2020 tax season… interesting.  As we approach June 15, which is typically the date second quarter estimated tax payments are due for most taxing authorities, many are wondering if they need to act now, or if they have until July 15, 2020 to make these payments.  The answer, as it usually is in taxation is, it depends.

 

Federal

The IRS recently released a reminder, that taxpayers with estimated tax payments for tax year 2020, originally due April 15 and June 15, are now due July 15. This means that

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