Tax Monitor

WEST VIRGINIA LEGISLATURE ALTERS PIERCING THE VEIL ANALYSIS FOR LIMITED LIABILITY COMPANIES

April 22, 2022

To avoid facing a piercing the veil argument, West Virginia limited liability companies should ensure they are adequately capitalized and carry sufficient insurance coverage. West Virginia Senate Bill 6 (“SB 6”), signed by Governor Justice on March 28, 2022 and effective June 10, 2022, limits the ruling of the Supreme Court of Appeals of West Virginia in Joseph Kubican v. The Tavern, LLC, 752…

8 Things to Keep in Mind for 2021 Tax Filing

March 8, 2022

Things to Keep in Mind for 2021 Tax Filing

While filing season is well under way for tax year 2021, it is important to keep in mind some of the issues specific to the 2021 tax year and some items that have been carried over from relief packages passed for tax year 2020.  A few key issues are discussed below. 

Return Processing.  As the IRS continues to struggle with staffing and processing issues,…

Fiduciary Obligations of 401k Trustees

February 3, 2022

The Supreme Court of the United States addressed 401k trustee fiduciary obligations in Hughes v. Northwestern University. For 401k fiduciaries, both employers and investment advisors, the case reaffirms earlier requirements that fiduciaries must monitor each and every investment offering in the plan for performance, fees, and expenses, and they have an obligation to remove imprudent investments,…

Save the Date! 2021 West Virginia Tax Institute - October 18th & 19th

September 28, 2021

The Seventy-Second Annual West Virginia Tax Institute Meeting will be live streamed on Monday and Tuesday morning, October 18 & 19, 2021 from 9:00 am to 12:00 pm each day. 

We are still busy finalizing the schedule and speakers for this year’s program. We anticipate that the Program will qualify for approximately 6 hours of CLE/CPE credit, 1.5 of which is in Ethics.   

The full Program details and…

PPP Application Deadline Extended to May 31, 2021

March 31, 2021

There is still time to apply for a Paycheck Protection Program (PPP) loan. President Biden has signed the PPP Extension Act of 2021. The new deadline for borrowers to submit a PPP loan application is May 31, 2021. The Small Business Administration (SBA) will have until June 30, 2021 to process applications received before June 1, 2021.

The PPP was set to expire on March 31, 2021 but the SBA has…

UPDATED SBA Expands Loan Calculation Options and Eligibility

March 4, 2021

On March 3, 2021, the Small Business Administration (SBA) issued an interim final rule titled, “Business Loan Program Temporary Changes; Paycheck Protection Program-Revisions to Loan Amount Calculation and Eligibility” (IFR)¹  and updated application forms related to the Paycheck Protection Program (PPP). The new rule will allow individuals who file an IRS Form 1040, Schedule C to calculate their…

White House proposes significant PPP changes midstream that will expand eligibility but temporarily limit access

February 22, 2021

Today the White House announced substantial proposed changes to the Paycheck Protection Program (PPP) some of which will take effect on February 24, 2021. On February 22, 2021, The White House Posted, “FACT SHEET: Biden-Harris Administration Increases Lending to Small Businesses in Need, Announces Changes to PPP to Further Promote Equitable Access to Relief” (Fact Sheet).¹ The proposal includes a…

Certain State Tax Treatment Of PPP Loan Forgiveness And Deductibility Of Expenses

February 16, 2021

Federal Treatment of PPP Loan Forgiveness and Deductibility of Covered Expenses

One of the largest relief programs contained in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) passed March 27, 2020, was the Payroll Protection Program (“PPP”), which provided forgivable loan assistance to companies seeking to maintain their payroll during the COVID-19 pandemic. The CARES Act…

Some Interesting Tax Provision of the Consolidated Appropriations Act of 2021

December 29, 2020

There were some long awaited tax changes contained in the Consolidated Appropriations Act of 2021 (the “CAA”), but there were also some interesting additions.

For example, the CAA clarified that taxpayers can deduct expenses paid with PPP Loan proceeds overturning the IRS guidance on this issue. This benefit is substantial for taxpayers and effectively increases the PPP Loan proceeds by the amount…

SBA begins to articulate the PPP loan necessity review process

December 10, 2020

On December 9, 2020, the Small Business Administration (SBA) issued an update to its Paycheck Protection Program Frequently Asked Questions (FAQs)¹ to address why some Paycheck Protection Program (PPP) borrowers are receiving a Loan Necessity Questionnaire² (Questionnaire). For over a month, draft questionnaires have been circulating and used by the SBA without official publication or…

Nontransparent PPP Loan Necessity Process Presents Substantial Risks for Borrowers and Lenders

November 30, 2020

All borrowers under the Paycheck Protection Program (PPP) certified that “current economic uncertainty makes this loan request necessary to support the ongoing operation of the Applicant.”¹  The Small Business Administration (SBA) has long planned to review borrower eligibility for all loans in excess of $2 million, in addition to other loans as appropriate, following a lender’s submission of the…

IRS Release -- Expenses Covered By PPP Loan Are Not Deductible in 2020 Regardless of the Timing of Forgiveness

November 19, 2020

The IRS has released guidance on the tax issues related to forgiveness of a PPP loan.  In general, under the CARES Act, forgiveness of a PPP Loan is excluded from gross income for federal income tax purposes.  The IRS has clarified that expenses covered by PPP Loan proceeds, namely payroll, are not deductible if the PPP Loan is forgiven.  IRS Notice 2020-32.
 
Recent IRS guidance takes…