Welcome to the Federal Tax Update Podcast, hosted by Lynn Nichols. This is presented as a member benefit by the South Carolina Association of CPAs. It is produced to provide current information about developments in U.S. tax law, such as cases, ruling, IRS pronouncements and expert comments on hot topics.

The commentary is brief, and you should not take a position on the items discussed until you thoroughly examine it with authoritative sources. All topics can be found discussed in further length at Tax Notes Today.

“I have relied on Tax Analysts® to provide reliable and timely analysis of Federal tax developments for over 30 years. The ‘headnotes’ you see here are from ‘Tax Notes Today,’ the preeminent source of accurate information and analysis of important developments and trends in Federal taxation,” Nichols says.

You can contact Lynn Nichols at lynnnicholscpa@outlook.com or 714.321.3387 and connect on LinkedIn.

This week’s news:

  • Doctor Materially Participated in Restaurants, Brewery
  • Syndicated Easements: Practitioners Being Referred to OPR

Nichols note: “The IRS is referring CPAs they believe are promoting Conservation easement tax shelters to the Office of Professional Responsibility (OPR). That’s bad news because it moves what would be a routine audit, taking months, up to a matter a judge could order completed in less than 90 days. OPR would issue an administrative summons instead of an Information Document Request.”

  • IRS Addresses Deductibility of Expenses Paid with PPP Loans

Nichols note: “The most important point on deductibility of expenses paid with PPP loan funds is that the IRS is debunking the notion that expenses paid with PPP loan funds that are (or are expected to be) forgiven are deductible in 2020.

 “Rev. Proc. 2020-51 provides a safe harbor for Paycheck Protection Program loan participants who have been denied full or partial loan forgiveness or have forgone loan forgiveness to claim a deduction for specified payments. Taxpayers forgoing loan forgiveness would be allowed to claim a deduction for otherwise deductible payments on income tax returns or information returns for the tax year the taxpayer is forgoing forgiveness.”

Blog outro: A federal tax specialist for 50 years, Lynn Nichols provides tax consulting services to CPA firms on complex federal income tax issues, professional standards in tax practice and effective tax practice management. Check out his Tax Updates video playlist.

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