The SBA continues to add to the frequently asked questions for payroll protection program loans, adding a new question 36 regarding the 500-employee threshold for PPP loans under the CARES Act.[1]

The Small Business Administration (SBA) has released a seven-page PDF giving details on exactly how to compute the maximum Payroll Protection Program (PPP) loan amounts for various entity types.[1] The details are being released days before the SBA again opens up to accepting new PPP loan applications from banks for approval.

The document does come with a footnote that states:

This document does not carry the force and effect of law independent of the statute and regulations on which it is based.

But the document does provide the following assurance:

Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rules. The U.S. government will not challenge lender PPP actions that conform to this guidance and to the PPP Interim Final Rules and any subsequent rulemaking in effect at the time.

So the document is best viewed as a “safe harbor” that can be used to escape potential scrutiny, but not as proof that a loan already approved was computed incorrectly. Presumably Treasury has taken this position in recognition of the fact that this guidance came out 21 days after the loan program had started and after the program had already used up the entirety of its first funding level.

Just before the weekend, the SBA added four additional questions (numbers 32-35 for those keeping count) to the Paycheck Protection Program Loans Frequently Asked Questions document on the SBA CARES Act website.[1] The four questions and answers deal with housing allowances, how to determine if an employee’s principal place of residence is in the United States and how the PPP program applies to agriculture.

This is the first addition to this list on the website since the SBA published an interim final rule allowing for guidance to appear on the SBA’s website.

Just prior to the President’s signing of the bill adding additional funding to the PPP loan program, the SBA issued yet another set of Interim Final Rules, this set dealing with the eligibility of certain businesses to obtain such a loan, impact of ESOPs on affiliation rules, guidance for a business in bankruptcy, formalizing the May 7 repayment safe harbor first discussed in the April 23 addition of Q&A 31 to the PPP FAQ by the SBA and authorizing additional guidance to be posted directly on the SBA website.[1]

Following the furor over PPP loans being given to certain public companies and the tweets of Senator Marco Rubio[1] pointing towards the certification that he indicated required a showing of need to receive a PPP loan, the SBA has added a new question to their FAQ on PPP loans.[2]

The IRS has issued additional guidance related to a problem Connecticut homeowners had with deteriorating concrete foundations due to pyrrhotite in the concrete mixture in Announcement 2020-5.[1]

The IRS has introduced relief for individuals who, due to travel restrictions imposed during the COVID-19 crisis, will now end up meeting the “substantial presence test” and would otherwise be treated as U.S. residents under IRC §7701(b)(3). The relief is found in Revenue Procedure 2020-20.[1]

The IRS is providing procedures for individuals who are not otherwise required to file a return for 2019 to receive economic impact payments under the CARES Act in Revenue Procedure 2020-28.[1] Key are new procedures for those who wish to file an electronic return, but have not been able to because they have zero adjusted gross income, resulting in their return being rejected by the IRS electronic filing system.

The IRS has released guidance on dealing with the change in depreciation for qualified improvement property in Revenue Procedure 2020-25.[1]

The IRS has added additional information, primarily related to C corporation taxpayers, to the FAQ on the temporary procedures for filing Forms 1045 and 1139.[1]

The IRS first addresses whether a similar procedure will be set up for handling the amended corporate return form, Form 1120X. And the answer is simple—no.

The IRS has released proposed regulations[1] that would set the IRS portion of the preparer tax identification number (PTIN) fee per application at $21, down from the current $33 level.

Although it’s now well after a large number of affected businesses had already applied for a loan under the Payroll Protection Program, the SBA has released additional guidance that explains how the program works for Schedule C filers and partners in a partnership. A new interim final rule (IFR), “Business Loan Program Temporary Changes; Paycheck Protection Program – Additional Eligibility Criteria and Requirements for Certain Pledges of Loans,” contains this information.[1]

Some estate tax filings being sent to the IRS via private delivery services (PDS) got caught being in transit at the wrong time when the IRS closed its Kansas City Service Center due to the COVID-19 outbreak. When the packages arrived in Kansas City the Center was closed and, in many cases, the PDS returned the packages to the sender as undeliverable.

The IRS has issued an FAQ page on its website to explain to affected taxpayers how to deal with this situation.[1] The FAQ provides answers to three questions.

The CARES Act added provisions allowing taxpayers to carry net operating losses from 2018 and 2019 back five years, potentially giving affected taxpayers access to much needed cash by filing a claim for refund. And the IRS has issued guidance allowing the Forms 1045 and 1139 to be used to claim the refunds under the tentative refund procedures.

But there is a problem—those forms cannot be filed electronically, and the IRS is not processing paper filed forms at this time, as all Service Centers have now been closed for an indefinite period of time. In order to address this issue, the IRS has released on its website temporary procedures for filing Forms 1045 and 1139 by fax.[1]

Some taxpayers who elected to be “electing real property trades or businesses” based on the provisions of §163(j) prior to amendment by the CARES Act likely regretted their decisions once the Act retroactively changed the limit from 30% of adjusted taxable income to 50% of adjusted taxable income temporarily. The IRS is now giving those taxpayers a chance to undo that election based on guidance in Revenue Procedure 2020-22.[1]

As well, the Procedure covers other new elections that are part of the CARES Act to deal with the changes made by that Act to §163(j).

The IRS has released a set of frequently asked questions on the deferral of the employer’s share of the FICA Old Age Survivor’s and Disability insurance tax, a provision added by the CARES Act.[1] While summarizing the relief provided in the Act, the FAQ also provides answers to some questions that had been raised under the provision.

The IRS is moving to simplify the filing of net operating loss carryback claims to take advantage of the CARES Act revisions to NOL provisions, by extending for six months the time period a tentative carryback form (Forms 1045 and 1139) may be filed, per Notice 2020-26.[1]

The CARES Act restored the ability to carryback net operating losses temporarily. The loss carrybacks were restored for 2018, 2019 and 2020, with special provisions provided for electing to carry losses from 2018 and/or 2019 forward to take care of the problem that it was too late in many cases to timely elect to forego the carryback period. In Revenue Procedure 2020-24[1] the IRS has provided procedures for actions related to these net operating losses.