The Department of Justice (DOJ) is investigating and prosecuting PPP fraud cases all over the country. Some people have already been convicted, while others are being secretly investigated. The Biden Administration has poured millions of dollars towards resources to ensure that investigations take place and the stolen money is recovered. They are working through various agencies such as the FBI and the IRS. It will be difficult for your business to walk away free if you fraudulently obtained any of the Covid relief money meant for struggling businesses. Therefore, start looking for any PPP red flags in your applications (for the first and second rounds).

What are PPP fraud investigators looking for?

Investigators are looking for information about facilitating institutions, such as banks, and borrowers of the Paycheck Protection Program (PPP). The investigations also include the Economic Injury Disaster Loan (EIDL) applications facilitated by the SBA. There is a consensus that not all safety precautions were taken during applications. Not many steps were taken to prevent fraud when these relief programs were introduced via the CARES Act. Fraudsters knew about this, and they pounced.

But now that the new administration is on the prowl for PPP fraudsters, what are they looking for? Investigators will ask the following.

• Whether you properly spent the borrowed funds – for the PPP, at least 60% of the funds were to be used on payroll-related costs. But some small business owners diverted this money to their personal expenses.
• Did you even qualify for the funds in the first place? – PPP funds were mainly to cover payroll costs. Some business owners lied about the size of their payroll costs to obtain hefty payments from the program.
• Did you apply through multiple lenders under false pretense? This move is called “loan stacking”. If they find you did this, you will be charged.
• Did you apply using falsified tax documents?
• Did you create a fake company to apply for the PPP loan?
• Did you use a company that stopped operating long back to apply? – using a defunct company is also a crime because no one works there anymore.
• Did you apply using a stolen identity? – a stolen identity must also result in the original owner of the identity being questioned. But investigations will eventually lead to the real culprit. No one is safe.

How to know if you are being investigated for PPP fraud?

Any PPP fraud scheme is likely going to be unearthed. Perpetrators will be punished. If you applied using false information in the first round, but you corrected it in your application for the second round, your name will likely be called next. Why? The inconsistency in both your applications serves as an indication that you, somehow, lied. It actually makes it easy for investigators to single your name out.

However, in case you have not been notified yet, it is easy to start asking yourself whether your name might be investigated next, or not. To do it, simply go back to the above list, where I listed a couple of things that the investigators are looking for. Improperly spending the PPP money is a red flag. If you know that you used yours to buy an expensive boat or gift for your lover, then they could be coming for you. Or, if you know that you applied using a defunct company, it is another red flag that must tell you that they could be coming for you next.

What should I do if my PPP is being investigated?

Finally, if your PPP or EIDL application is being investigated, they may send you a notification requesting evidence surrounding your applications and how you spent the money. This could be done in a friendly manner, or they could throw a subpoena in your face, forcefully gaining access to every document in your company. That could be hectic and traumatizing.

Nevertheless, if you receive a request for more information about your company and PPP or EIDL loan applications, you know it has officially begun. At that moment, you need to think soberly before making any move. Below are some of the steps to take as soon as you receive that request.

• Immediately contact your lawyer.
• Alert your employees and let them look for any supporting documents relating to the PPP or EIDL applications. Also, gather all receipts or evidence of how you spent the money.
• Tell your financial partners about the investigation, especially those who handled any of this money. This is important in case the government raises money laundering charges on you.

People have also asked the following questions

1. Are PPP loans under investigation?

Yes. Many government agencies are investigating PPP loans. This includes the FBI, Secret Service, the IRS, and the Small Business Administration (SBA), which is the primary agency disbursing PPP loans. The SBA is also the lead investigator in many cases.

2. Why is my bank investigating PPP loans?

Banks, even though they were guaranteed protection regarding some false information submitted, they do have a duty to uphold good financial conduct among their clients. They should be able to prevent fraudulent applications from going through to any government agency. As such, the SBA is holding them to this fiduciary duty. And many of them have been subpoenaed to provide access to thousands of PPP applications that raise a red flag.

3. What happens if you fraudulently get a PPP loan?

You will be investigated and go to jail. They will also ask you to return the money that you stole.

4. Will PPP loans be audited?

All PPP loans above $2 million will be audited, according to the SBA.

5. How do you know if your PPP loan was approved?

PPP loans were applied through various financial institutions. Therefore, to know if yours was approved, simply contact your bank or the SBA.

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Treasury announced the possibility of PPP loans being totally forgiven. Or in part, depending on how good you make your application. Therefore, it is quite imperative that you understand the requirements of the application process. To increase your chances of being fully forgiven of the amount.

Below are the first things you need to understand before making the application. Your business must fulfill one of the following conditions;

1. Your business (being referred to as the ‘borrower’), must be a self-employed individual, independent contractor, or sole proprietor. Who had no employees when you applied for the PPP loan. You must also haven’t included any employee salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483).
2. Must not have reduced employee salaries by more than 25% during the ‘covered period’. You must also haven’t reduced the number of employees or their working hours between 1 January 2020 and the covered period.
3. Besides the above, your business must have only failed to operate because of the guidelines issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to the maintenance of standards of sanitation, social distancing, or any other work or customer safety requirement related to COVID-19.

In light of the above, the covered period is the period between the initial issuance of the PPP loans. And their expiration date. The initial covered period was 8 weeks and was extended to 24 weeks.

Nevertheless, here is more on what you need to know;

• The Covered Period is either the 24-week period beginning on the PPP Loan Disbursement Date or, if the Borrower received its PPP loan before June 5, 2020, the Borrower may elect to use an eight-week (56-day) Covered Period.
• Treasury has provided more information on how the Forgiveness Amount will be calculated.

If any of the above contains something you don’t understand, it is important that you get in touch with us to fully understand. Some omissions may cost your business tens of thousands, we both don’t want that to happen. Get in touch with us and have all the relevant information explained to you.

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As it became evident that COVID-19 was going to leave a trail of damage to businesses across the states, Treasury availed small business loans to support with payroll costs and more. These were termed the Paycheck Protection Program (PPP) and the CARES Act. The former was later announced that it could be fully forgiven. Shrouded in these loans were several unclear clauses. As we mentioned before, for example, their maturity. As such, we are happy that the Treasury and SBA have released rules that provide further guidance.

Before looking into the revisions to the First Interim Final Rule, here are some few things to know about the PPP:

• Many PPP borrowers can now start applying for loan forgiveness since their 8-week periods have passed.
• In the past, businesses were confused about loan forgiveness, deadlines. And how to count the start or end of the 8-week period. But the Flexibility Act enhanced the ability of lenders to make loans. And process loan forgiveness applications.

However, businesses that are yet to access the PPP loans need to apply as soon as possible since the SBA’s mandate to guarantee loans expires on the 30^th of June 2020.

Below, we move on to the Revisions to First Interim Final Rule (85 FR 20811) of the PPP. These were drafted to achieve the following;

• To amend the covered period for PPP Loans from having a beginning and ending date of the 15th of February, 2020. And the 30th of June, 2020, respectively, to ending date of the 31st of December 2020.
• To extend the maturity date for PPP loans to 5 years. This applies to loans initially given a 2-year maturity date before the enactment of the Flexibility Act.
• To revise the deferral period on PPP loans. This means that, if borrowers submit to their lender a loan forgiveness application within ten months after the end of their loan forgiveness covered period, they will not have to make any payments of principal or interest on their loan before the date on which the SBA remits the loan forgiveness amount on the loan to the lender that they got the loan through.
• To point out that an eligible borrower will not be responsible for any loan repayment. If the borrower uses all of the loan proceeds for forgivable purposes, or if employee and compensation levels are maintained.
• To also reduce the mandatory initial 75% loan usage on payroll-related costs. To a minimum of 60% to qualify for full loan forgiveness.
• To provide further guidance over how borrowers may use the PPP loans to qualify for full forgiveness.

If you need further clarification on the above, do not hesitate to get in touch with us, we will happily provide answers to your questions.

The post Treasury and the SBA releases Revisions to the First Interim Final Rule on the Business Loan Program first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

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The SBA and the treasury announced that applications are now open for small businesses to apply for the Paycheck Protection Program (PPP) Loan forgiveness. All small businesses must apply since this will not be auto-applied on them.

To check if your small business is eligible for applying, the pointers below should give you a comprehensive guideline. Businesses that qualify must fall into the following categories;

• Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
• Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
  • 500 employees, or
  • That meets the SBA industry size standard of more than 500
• Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
• Sole proprietors, independent contractors, and self-employed persons

Applications are effective as of the 15^th of May, and, if you have any questions, or are struggling to understand one or more of the above, promptly get in touch with us so that we can walk you through everything and help you get that PPP loan forgiveness.

For applications, visit the SBA website and follow instructions thereon.

Ps: Need help on your PPP Loan Forgiveness? Click here to have your Free PPP LOAN Quick Chat with us!

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The post Economic Impact Payment Online Application Tools first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

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Yesterday, the IRS in conjunction with the Treasury Department and the Social Security Administration, announced that recipients of Supplemental Security Income (SSI) will automatically receive their Economic Impact Payments.

With this announcement, the IRS has quashed many rumors and doubts that this group was going to be left out. When other citizens are receiving their portion of the economic impact payment. However, there is a slight difference in the timeline to the rest of the taxpayers. The SSI recipients will start receiving their payments no later than early May 2020.

This decision came on the back of weeks of discussion between the IRS, Treasury, and the SSA. This special group existed because they naturally do not have to file for taxes meaning that the IRS wasn’t going to have their banking details readily available.

What else is there to know about this development?

• SSI recipients do not have to do anything, nor do they have to provide any additional information to receive their payments
• If they also have qualifying children (those under 17), they too can quickly apply for them to get their $500 payments using a special tool designed for this purpose on the IRS website.

As we receive this good development from the IRS, the Treasury, and the SSA. We still urge tax practitioners and those who can assist our elderly pensioners. By claiming their economic impact payment to exercise caution. As it is, many scammers are out here looking for those they may defraud of their payment. Having said that, we are open to give any tax-related advice to individuals and small businesses. Schedule a quick tax chat with us to learn more about our services. See below…

Ps: If you have a question about what is happening and what needs to be done get Coronavirus Stimulus check. Go to our Coronavirus FAQ: The Cares Act. Don’t forget that we can help you file your taxes! Have a Free Quick tax Chat with your Dave Ramsey Endorsed Tax Accountant.

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The COVID-19 pandemic is not showing signs of slowing down anytime soon. As this is happening, neither is the approved initial Paycheck Protection Program and Economic Injury Disaster Loan going to sustain. All small businesses throughout the extension of the ‘stay home’ period.

Therefore, U.S. Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza. Issued a statement urging Congress to appropriate additional funds for the Paycheck Protection Program.

In time for the following reasons;

1. There are legal implications that will see the program not being able to continue beyond an initial lapse of the program. With regard to this, the statement said. “By law, the SBA will not be able to issue new loan approvals once the programs experience a lapse in appropriations.”
2. All small businesses. Which are supposed to benefit from the program, are yet to do so as revealed by the statement. Which stated that “We want every eligible small business to participate and get the resources they need.”
3. The SBA has processed more than 14 years’ worth of loans in the past two weeks. And the phenomenal number of applicants calls for an urgent expansion of the program. So that gains of the initial phase will not be crowded out by huge expenses that could result from the abandonment of the program.

On the back of this. it is clear that small businesses need to keep on getting updated information about the Paycheck Protection Program. For such, you can get in touch with us so that we get your details for our timely updates.

Ps: If you have a question about what is happening and what needs to be done get Coronavirus Stimulus check. Go to our Coronavirus FAQ: The Cares Act. Don’t forget that we can help you file your taxes! Have a Free Quick tax Chat with your Dave Ramsey Endorsed Tax Accountant.

The post SBA’s Paycheck Protection Program and Economic Injury Disaster Loan Program first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post SBA’s Paycheck Protection Program and Economic Injury Disaster Loan Program appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.