Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (157617)	5/9/2020 4:37:10 PM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 217543

ABC News Missing Idaho kids' uncle died of blood clot in Arizona A pulmonary blood clot killed the brother of an Idaho woman who's facing charges in the disappearance of her children — a case that attracted worldwide ... Yesterday bookmark_border share more_vert KSL.com Medical examiner says Alex Cox had blood clots in his lungs and died of natural causes Alex Cox, Lori Vallow Daybell\u2019s brother, had blood clots in his lungs, high blood pressure and died of natural causes. That\u2019s according to a report ... Yesterday bookmark_border share more_vert

To: TobagoJack who wrote (157617)	5/9/2020 4:40:37 PM
From: Pogeu Mahone	1 Recommendation Recommended By marcher Read Replies (2) \| Respond to of 217543

The Stunning IRS Ruling That May Bankrupt Small Businesses That Took PPP Loans Bruce Willey, JD, CPA, Founder, American Tax & Business Planning KiplingerMay 8, 2020 The IRS just did something that stunned me. It pulled the rug out from under desperate small-business owners just as they were starting to get their feet under them. SEE ALSO: Answers to PPP Loan FAQs (Now That There's Fresh Funding for the Loans)It was about a month ago that I praised what I saw as the one of the most comprehensive, beneficial acts of Congress in American history. With the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, I saw the federal government committing to what I committed to doing for my clients decades ago: help small businesses. While not sold as a clear and free windfall, the drafters of CARES made it clear: Spend this money on the right things -- like keeping your employees on the payroll -- and keep your books in order, and any loans you receive under the program would be forgiven. It was a lifeline to small businesses when they needed it most. A way to defend them, and by virtue the U.S. economy, from mass extinction. IRS Takes Action After-HoursBut now that lifeline is being yanked away. On April 30, late in the evening -- when few people were likely paying attention -- the IRS released guidance that essentially nullified much of the benefit of the Paycheck Protection Program (PPP) created under the CARES Act. It stated that those who receive PPP may not receive tax deductions for using those funds to pay expenses. That includes expenses like payroll and rent, the very point of the PPP. Congress specifically drafted the legislation so that small businesses could receive PPP loans without having to count it as taxable income. That makes the IRS' move all the more stupefying. And it could cost some small businesses on the brink more than they can afford. How Much Could It Cost Businesses?That cost isn't theoretical. It's actually fairly easy to quantify. Let's say a small-business owner requests and receives $600,000 to cover payroll for the 10 weeks where he or she is covered by the PPP. If they can't deduct that amount as expenses, that means their federal tax burden clocks in at a rate of 37%. That equates to a $222,000 increase in their taxable income. Meaning the effective tax-free benefit of the loan is $378,000, not the $600,000 intended by the law. See Also: To Succeed, Small-Business Owners Need to Put Their Own Finances FirstWhy Some May Say Move Makes SenseThe IRS has one goal: to collect revenue, so maybe this move shouldn't have surprised me. Your tax adviser might tell you that they actually saw this coming all along, and it's just how the IRS works. After all, to prevent "double dipping," the law doesn't allow deductions for expenses that are otherwise exempt from tax. Even though Congress didn't create an exception to this rule, lawmakers intended the expenses to be deductible to provide the greatest possible benefit for small businesses. And while this type of tax exemption is usually reserved for organizations like churches and the military, it makes sense to expand it in the midst of a pandemic where most of the businesses receiving the PPP aren't able to operate or bring in income due to state or local orders. What You Can Do about ItThe only advice I can give to my clients is to push back. The truth is that your voice matters. We do not have to collectively lay down and just take whatever the IRS hands down. Call your senator, the Small Business Administration and local representatives. Call your local news station and tell them how this change is going to hurt your business. I've made my career caring for my clients and sticking up for them. And right now, that includes contacting my own senator, which I did the moment I heard about this guidance from the IRS. If there's enough collective pressure, the IRS will either back down, or Congress will pass legislation that explicitly puts PPP tax deductions into law. A bill has already been introduced in the Senate that would make it clear that small businesses can deduct expenses paid with a forgiven PPP loan. There's strong bipartisan support for the bill, so its eventually passage looks promising -- but the Treasury Department opposed the legislation. If our only option is to put pressure on the Treasury, then that's what we'll do. Thankfully, likely after receiving messages from frustrated and beaten down business owners, a bipartisan group of congressional leaders on May 5 sent a letter to Treasury Secretary Steve Mnuchin asking him to reverse course on this shortsighted rule change. The letter states it nearly perfectly: Story continues