Author: admin-hsc

Posted on April 13, 2020

IRS Provides Filing Relief for Form 5500 Filings Due Before July 15, 2020

Posted on April 13, 2020

The IRS issued Notice 2020-23 which provides additional filing relief for taxpayers affected by the ongoing Coronavirus pandemic. The IRS relief includes Form 5500, Annual Return/Report of Employee Benefit Plan, due to be filed (originally or pursuant to a valid extension) on or after April 1, 2020 and before July 15, 2020. With the relief the due date for filing is July 15, 2020. The relief is automatic and taxpayers do not have to call the IRS or file extension forms or send letters or other documents to receive this relief. Additional filing extensions beyond July 15 must be requested using the appropriate extension form by July 15, but the extension may not go beyond the original or regulatory extension date. The IRS filing relief for Form 5500 comes through Rev. Proc. 2018-58 . Notice 2020-23 states that Specified Time Sensitive Actions are covered and refers taxpayers to Rev. Proc. 2018-58 which explicitly includes Form 5500. This immediate relief does not extend to calendar year 2019 Form 5500 filings originally due July 31, 2020. The EBPAQC will continue to advocate for and monitor filing relief from the IRS and DOL, and will communicate to members any additional relief notices.

Please contact Paul Esche, CPA, CCIFP, CCA at pesche@hsccpa.com for more information.

IRS Releases Q&A on Payroll Tax Deferral Program – Clarifies When it Can Be Used In Relation to PPP Loan Forgiveness Program

Posted on April 13, 2020

The Coronavirus, Aid, Relief and Economic Security Act (CARES Act) allows employers to defer the deposit and payment of the employer’s share of social security taxes and self-employed individuals to defer payment of certain self-employment taxes.  These FAQs address specific issues related to the deferral of deposit and payment of these employment taxes.

These FAQs will be updated to address additional questions as they arise.

Please contact Matt Folz, CPA at mfolz@hsccpa.com or Scott Touro, MBA at stouro@hsccpa.com with any questions.

Webinar – Paycheck Protection Program Loans – Act II Maximizing Forgiveness |Maintaining Compliance

Posted on April 13, 2020
If you have applied for or received a Paycheck Protection Program Loan, you will soon be faced with the second act. . . maintaining compliance and maximizing forgiveness.  Join this special webcast presented by our COVID-19 Fast Response Team members to learn about how the forgiveness calculations work, what still needs to be explained in the regulations, and how to maintain compliance with your PPP Loan.

Date: Thursday, April 16th

Time: 12:00 CT/1:00 ET

REGISTER HERE

Space is limited – first come, first served.

CARES Act Provider Relief Fund

Posted on April 10, 2020

President Trump is providing support to healthcare providers fighting the COVID-19 pandemic. On March 27, 2020, the President signed the bipartisan CARES Act that provides $100 billion in relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response. This funding will be used to support healthcare-related expenses or lost revenue attributable to COVID-19 and to ensure uninsured Americans can get testing and treatment for COVID-19.

Immediate infusion of $30 billion into healthcare system
Recognizing the importance of delivering funds in a fast and transparent manner, $30 billion is being distributed immediately – with payments arriving via direct deposit beginning April 10, 2020 – to eligible providers throughout the American healthcare system. These are payments, not loans, to healthcare providers, and will not need to be repaid.

Who is eligible for initial $30 billion?

  • All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial rapid distribution.
  • Payments to practices that are part of larger medical groups will be sent to the group’s central billing office.
    • All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).
  • As a condition to receiving these funds, providers must agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.
  • This quick dispersal of funds will provide relief to both providers in areas heavily impacted by the COVID-19 pandemic and those providers who are struggling to keep their doors open due to healthy patients delaying care and cancelled elective services.
How are payment distributions determined?
  • Providers will be distributed a portion of the initial $30 billion based on their share of total Medicare FFS reimbursements in 2019. Total FFS payments were approximately $484 billion in 2019.
  • A provider can estimate their payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000. Providers can obtain their 2019 Medicare FFS billings from their organization’s revenue management system.
  • As an example: A community hospital billed Medicare FFS $121 million in 2019. To determine how much they would receive, use this equation:
    • $121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000
What to do if you are an eligible provider?
  • HHS has partnered with UnitedHealth Group (UHG) to provide rapid payment to providers eligible for the distribution of the initial $30 billion in funds.
  • Providers will be paid via Automated Clearing House account information on file with UHG or the Centers for Medicare & Medicaid Services (CMS).
    • The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the payment description.
    • Providers who normally receive a paper check for reimbursement from CMS, will receive a paper check in the mail for this payment as well, within the next few weeks.
  • Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The portal for signing the attestation will be open the week of April 13, 2020, and will be linked on this page.
  • HHS’ payment of this initial tranche of funds is conditioned on the healthcare provider’s acceptance of the Terms and Conditions – PDF, which acceptance must occur within 30 days of receipt of payment.  If a provider receives payment and does not wish to comply with these Terms and Conditions, the provider must do the following: contact HHS within 30 days of receipt of payment and then remit the full payment to HHS as instructed.  Appropriate contact information will be provided soon.

Is this different than the CMS Accelerated and Advance Payment Program?

Yes. The CMS Accelerated and Advance Payment Program has delivered billions of dollars to healthcare providers to help ensure providers and suppliers have the resources needed to combat the pandemic. The CMS accelerated and advance payments are a loan that providers must pay back. Read more information from CMS.

How this applies to different types of providers?

All relief payments are being made to providers and according to their tax identification number (TIN). For example:

  • Large Organizations and Health Systems: Large Organizations will receive relief payments for each of their billing TINs that bill Medicare. Each organization should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments.
  • Employed Physicians: Employed physicians should not expect to receive an individual payment directly. The employer organization will receive the relief payment as the billing organization.
  • Physicians in a Group Practice: Individual physicians and providers in a group practice are unlikely to receive individual payments directly, as the group practice will receive the relief fund payment as the billing organization. Providers should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments.
  • Solo Practitioners: Solo practitioners who bill Medicare will receive a payment under the TIN used to bill Medicare.

Please contact Brenda Wallace, CPA, CMPE at bwallace@hsccpa.com for more information.

HHS to Begin Immediate Delivery of Initial $30 Billion of CARES Act Provider Relief Funding

Posted on April 10, 2020

Today, the Department of Health and Human Services (HHS) is beginning the delivery of the initial $30 billion in relief funding to providers in support of the national response to COVID-19 as part of the distribution of the $100 billion provider relief fund provided for in the Coronavirus Aid, Relief, and Economic Security (CARES) Act recently passed by Congress and signed by President Trump.

The $100 billion of funding will be used to support healthcare-related expenses or lost revenue attributable to coronavirus and to ensure uninsured Americans can get the testing and treatment they need without receiving a surprise bill from a provider. The initial $30 billion in immediate relief funds will begin being delivered to providers today.

Recognizing the importance of delivering the provider relief funds in a fast, fair, and transparent manner, this initial broad-based distribution of the relief funds will go to hospitals and providers across the United States that are enrolled in Medicare. Facilities and providers are allotted a portion of the $30 billion based on their share of 2019 Medicare fee-for-service (FFS) reimbursements. These are payments, not loans, to healthcare providers, and will not need to be repaid.

HHS and the Administration are working rapidly on additional targeted distributions to providers that will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, and providers of services with lower shares of Medicare FFS reimbursement or who predominantly serve the Medicaid population. This supplemental funding will also be used to reimburse providers for COVID-19 care for uninsured Americans.

HHS is partnering with UnitedHealth Group (UHG) to deliver the initial $30 billion distribution to providers as quickly as possible. Providers will be paid via Automated Clearing House account information on file with UHG, UnitedHealthcare, or Optum Bank, or used for reimbursements from the Centers for Medicare & Medicaid Services (CMS). Providers who normally receive a paper check for reimbursement from CMS will receive a paper check in the mail for this payment as well, within the next few weeks.

Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The portal for signing the attestation will be open the week of April 13, 2020 and will be linked from hhs.gov/providerrelief.

UnitedHealth Group will donate all fees for the administration of the CARES Act provider relief fund.

Visit hhs.gov/providerrelief for additional information.

Please contact Brenda Wallace, CPA, CMPE, at bwallace@hsccpa.com for more information.

FASB to Defer ASC 606 for Private Franchisors and ASC 842 for Certain Entities

Posted on April 10, 2020

At its meeting on April 8, 2020, the Financial Accounting Standards Board (FASB) decided to propose the following effective date deferrals due to the coronavirus pandemic:

  • Proposal to defer the effective date of Topic 606, Revenue from Contracts with Customers, of the FASB’s Accounting Standards Codification (ASC) by one year for franchisors that are not public business entities (as defined in the Master Glossary of the ASC).
  • Proposal to defer the effective date of ASC 842, Leases, for all of the following entities by one year: (a) private companies, (b) not-for-profit entities that have issued, or are conduit bond obligors for, securities that are traded, listed or quoted on an exchange or an over-the-counter market (i.e., public not-for-profit entities) that have not yet issued financial statements and (c) private not-for-profit entities (i.e., not-for-profit entities other than those considered public).

For additional information about these deferrals to be proposed by the FASB, refer to the RSM our article, FASB to provide limited deferrals for ASC 606 and ASC 842.

Please contact Paul Esche, CPA at pesche@hsccpa.com for more information.

Filing and Payment Deadlines Questions and Answers

Posted on April 10, 2020

In Notice 2020-18 (PDF), the Treasury Department and the Internal Revenue Service (IRS) announced special Federal income tax return filing and payment relief in response to the ongoing Coronavirus Disease 2019 (COVID-19) emergency. Attached are answers to frequently asked questions related to the relief provided in the Notice. These questions and answers will be updated periodically and are designed to be a flexible tool to communicate information to taxpayers and tax professionals in this changing environment. The answers to these questions provide responses to general inquiries and are not citable as legal authority.  Accordingly, the Treasury Department and the IRS are continuing to consider additional IRB guidance on these issues addressed in these FAQs.

Please contact John Rittichier, CPA at jrittichier@hsccpa.com or Mike Vogel, CPA at mvogel@hsccpa.com for more information.

IRS Extends More Tax Deadlines 

Posted on April 10, 2020

Individual, Trusts, Estates, Corporations, and Others

Yesterday’s notice expands this relief to additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time. This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.

Estimated Tax Payments

Besides the April 15 estimated tax payment previously extended, today’s notice also extends relief to estimated tax payments due June 15, 2020. This means that any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.

Please contact John Rittichier, CPA at jrittichier@hsccpa.com or Mike Vogel, CPA at mvogel@hsccpa.com with any questions

Main Street Lending Program

Posted on April 10, 2020

The Federal Reserve made history on Thursday by moving aggressively to provide up to $2.3 trillion in liquidity commitments to support the economy. This policy intends to bolster households, small and medium-sized firms, and the ability of state and local governments to float debt to ensure critical services during the pandemic.

Like the Paycheck Protection Program, we anticipate that the Main Street program will experience greater-than-expected demand and will very likely be oversubscribed. Eligibility is based on firms with revenues of less than $2.5 billion in 2019, or firms with up to 10,000 employees. Each firm must be a business that is created or organized in the United States with significant operations and a majority of its employees in the U.S.

Loan terms are a four-year maturity at an adjustable rate of SOFR plus 250-400 basis points with the minimum size of $1 million. Amortization of principal and interest will be deferred for one year. The maximum size will be the lesser of $25 million or an amount that, when added to the borrower’s existing and committed but undrawn debt, does not exceed four times the borrower’s 2019 EBITDA. Prepayment will be permitted without penalty.

The facility does contain some loose conditionality around efforts to maintain payroll and retain its employees during the term of the loan, as well as not cancel or reduce any existing lines of credit to the eligible lender or any other lender. In addition, loans obtained through the facility will not be used to repay or refinance pre-existing loan balances.

Here’s a picture of how it is intended to work

For additional information about the Main Street Lending Progrom, refer to the RSM article, Fed introduces Main Street Lending Program.

Please contact your HSC advisor, or Scott Touro, MBA at stouro@hsccpa.com with any questions you may have.

10 Financial Planning Opportunities to  Consider Now

Posted on April 8, 2020

The current market situation is an example of why financial planning (with a keen eye toward tax outcomes) is the cornerstone of investment decisions, retirement planning, business transitions, insurance choices, etc.  A drop in the market provides plenty of planning opportunities to consider.

  1. Roth conversions – Convert Traditional IRA accounts to Roth IRAs to maximize future tax-free growth and income distributions as the market recovers.
  2. Increase plan contributions – Increase current 401k/403b contributions to “buy low” when the market is down and increase tax-deferred growth potential.
  3. 529 Plans – For the same reasons above, consider “max funding” or taking advantage of the 5 year “bunching” rule for gifts to 529 Plans.
  4. RMD’s – Stop or delay – Delay taking required minimum distributions until later in the year to allow accounts to recover (or don’t take them at all for 2020 if you don’t need to).
  5. Roth deferrals – Consider switching traditional 401k/403b deferrals to Roth deferrals if household income this year will be lower this year.
  6. Tax loss harvesting – Tax loss harvest to generate capital losses that can be used to offset capital gains now and in the future.
  7. Estate and asset protection planning – Consider several strategies for asset protection and estate tax planning.
    • Consider gifts to irrevocable trusts using assets that have reduced in value. Consider creating a Spousal Lifetime Access Trust (SLAT) that allows your spouse to control and receive income from the assets in the trust.
    • In addition to, or alternatively, sell depressed assets to the trust in return for a promissory note using current low applicable federal rates.
    • If you have grantor trusts in place (e.g. Intentionally Defective Grantor Trusts), consider swapping assets that have a currently depressed value for assets inside the trust that may be holding their values. This allows currently depressed assets to recover in value outside of your estate.
    • Create and fund Grantor Retained Annuity Trusts (GRATs).  These trusts rely on the appreciation on the assets beating the growth based on current applicable federal rates GRATs work best as estate planning vehicles when interest rates are low and with assets that are likely to appreciate significantly over time.
  8. Invest some excess cash – Begin dollar cost averaging cash that is earmarked for long-term investment.
  9. Re-balancing – Now and going forward, awareness to portfolio re-balancing frequency to maintain appropriate allocations.
  10. Refinance – Consider refinancing your mortgage and intra-family loans – interest rates are fluctuating quickly, but may be worth looking into.

The ideas above may or may not be applicable to your personal situation and should be discussed with your advisors prior to implementation. Please contact your HSC advisor, HKFS financial planning consultant, Kathy Ettensohn, CPA kettensohn@hsccpa.com, or Scott Olinger, CPA, CGMA  solinger@hsccpa.com with any questions you may have.