Tax Update RE: SBA Loans, Stimulus Payment & IRS Process

Tax Update RE: SBA Loans, Stimulus Payment & IRS Process

We know it continues to be a challenging and constantly changing world at present. We’re doing our best stay abreast of new developments and wanted to pass them along as we get them.

Here are a few important items.

  • SBA Small Business Loans (PPP, EIDL) under the CARES Act – Most banks are now online to begin processing PPP loans and the SBA is beginning to accept EIDL applications as well. And April 10th is also the official date that self-employed, independent contractors, and Sole Proprietors can begin making application. Early estimates suggest that a large majority of small businesses (500 or fewer employees) will apply and it’s anticipated that there may not be enough $$$ allocated to fund every applicant. The Treasury has requested an additional $250 billion (in addition to the $349 billion already allocated) to help relieve the pressure. Some applications are now beginning to be processed but the kinks in the system remain problematic and actual funding at this point is sporadic. We continue to recommend that those interested apply through their own bank but also access as many other avenues to submit an application as possible in order to maximize the chance of getting funding. Because the programs became available before the systems were in place it’s likely to be a messy process. Patience and persistence are likely to be the best practice on this
  • Stimulus Payments – The Treasury is beginning to issue Stimulus Payments to individuals/families this week where direct deposit information is on file with the IRS. An anticipated 45+ million deposits are expected to transmit this weekend. Another 30 million should transmitt next week. The remaining 70+ million payments will either be sent as checks to the last address on file or issued once the IRS receives the necessary information. A website is now available to update information if you didn’t file a return in 2018 and 2019 or need to update your deposit information –
  • Healthcare Provider Relief Funds – Under the CARES Act, healthcare providers who provide services to Medicare beneficiaries will begin receiving support payments starting April 10th. These are payments (not loans) and do not need to be repaid. Providers will receive 6.2% of their Medicare Fee-for-Service billings in 2019. The funds are automatically distributed. Details are available at gov.
  • IRS Processing Stalled – Most of the IRS is shut down at present. Phones, faxes and mail are not being answered and most IRS facilities are dormant. Refunds are being processed (including stimulus payments) but outside those, and a few other essential functions, everything else is on hold. But automatic mail notices continue to be sent. As a result, you may still receive an IRS notice that requires a response but there’s currently no way to contact the IRS regarding the request. The IRS is aware of the issue and has suspended virtually all collect actions, audit actions, installment payments, or other matters driven by a deadline. We still recommend responding timely (the date still matters) but since no mail’s being processed, it’s likely responses will take months to be processed (and many will be lost). Don’t be surprised if the response needs to be resent once the IRS resumes normal operations (expected sometime in mid-July).

Our staff has been amazing through it all and we’ll continue to focus our efforts on helping you during these interesting times. We’ll do our best to keep passing information along as it becomes available. Please don’t hesitate to contact us as the need arises.