Sasserath & Co.

Sasserath & Zoraian, LLP, a New York CPA firm providing accounting, tax, and business advisory services, is pleased to announce that George Batas has been promoted to Partner as of January 1, 2021.

George Batas joined Sasserath & Zoraian in 2017, where he quickly became instrumental in establishing and running the firm’s State and Local Tax (SALT) department as well as working with international clients. He prides himself on being a critical resource for clients as they expand their businesses throughout the world.

“When I joined S&Z, my dream was always to become a partner. After 4 years of working with some of the brightest partners and staff in the industry, I have managed to complete this dream. I look forward to continue growing both on the individual and firm level,” said Batas.

Batas will continue to focus on growing their International and SALT departments upon his new role. Batas has in-depth experience advising closely held businesses as well as high-net-worth individuals on a wide range of complex tax issues. His work includes the preparation of sales tax returns for all states, nexus consultation and analysis, exposure analysis, voluntary disclosures for sales tax and income tax, sales tax audits, residency audits, and state registrations. Most recently, he has dedicated himself to understanding the ins and outs of the Paycheck Protection Program (PPP), helping clients maximize their loan forgiveness during a time of unprecedented financial strain.

Batas also provides accountant services to the firm’s numerous international clients, particularly on the corporate side. He works with clients to prepare to establish U.S. operations including registration with state authorities, applying for EINs, registering for sales tax collection, registering for payroll tax, and helping familiarize clients across the globe with the U.S. tax system.

“George brings tremendous talent, dedication, and experience to the firm which strengthens the depth and knowledge of our partner group,” said S&Z Partner Alan Sasserath. “We look forward to his helping the firm to continue to evolve and grow in the years to come.”

1. previously received and used a First Draw PPP loan on qualified expenses prior to the disbursement of the Second Draw PPP loan;
2. are eligible small entities that have 300 employees or less; and
3. can demonstrate at least a 25% reduction in gross receipts between the same quarter in 2019 and 2020.

By George Batas

As such an unprecedented year draws to a close, employers and employees alike may be interested to know that Section 139 of the Internal Revenue Code allows an employer to make qualified disaster relief payments to an individual on a tax-free basis. The employer would get a deduction for the payments and the individual would receive the money tax-free.

To qualify under Section 139, a two-prong test must be met. First, a “qualified” disaster must have occurred. Based on the Emergency Declaration, the pandemic has met this test. The second test is that payments must be considered “qualified” disaster relief payments. Qualified disaster relief payments are meant to include any amount to reimburse or pay reasonable and necessary personal, family, living, or funeral expenses because of a qualified disaster. Some expenses that could fall into this category include costs associated with establishing a home office, medical expenses related to COVID-19 and not covered by insurance, dependent care expenses incurred due to closure of existing care providers, costs associated with alternative forms of commuting due to mass transit being unavailable or unsafe, and costs to purchase PPE . The payments from Section 139 are not allowed to be a replacement of wages to an employee.

Although there is no specific requirement for employers to adopt a written plan or policy to make qualified disaster payments, it is recommended that the employer put together a plan that would communicate who is eligible for the payments, what expenses would be covered, whether the employee must provide receipts or other proof of payments, and how and when the payments are to be made. The IRS has specifically stated employees are not required to account for actual expenses to qualify for the Section 139 exclusion as long as the amount of payments can be “reasonably expected to be commensurate with the expenses incurred.” It is highly recommended that the employer have signed statements from employees affirming that their claims arise from an area covered by the disaster declaration, that they have incurred qualified expenses, and that their expenses will not be covered through an insurance policy.

If you have questions regarding Section 139 qualification, please contact us.

The IRS announced this week that starting in January 2021, the Identity Protection (IP) PIN opt-in program will be expanded to all taxpayers who can properly verify their identities. The IP PIN is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number on fraudulent federal income tax returns. An IP PIN helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return.

The fastest way to get an IP PIN is through the IRS’s “Get An IP PIN” tool. Expected to be available in mid-January, the tool uses Secure Access authentication, which verifies a person’s identity through several different methods. Once received, an IP PIN is valid for one year; taxpayers must obtain a newly generated IP PIN each January. The IRS plans to offer an opt-out feature to the IP PIN program in 2022 if taxpayers find it is not right for them.

More information is available here.

By Alan R. Sasserath, CPA, MS

Several months have passed since a constant stream of critical PPP updates dominated our days. However, we are writing now because last week the Small Business Administration (“SBA”) released a notice that it will seek to obtain certain information from PPP loan borrowers whose PPP loan exceeds $2 million.

The SBA will seek to obtain such information via two new forms:

1. Form 3509 – Loan Necessity Questionnaire (For-Profit Borrowers)
2. Form 3510 – Loan Necessity Questionnaire (Non-Profit Borrowers)

Proposed versions of the forms are attached, and the public has until November 25, 2020 to submit comments regarding the content of such forms before they are finalized.

This request relates to the certification made by every company that applied to the PPP that stated, “Current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” (the “Certification”).  This Certification has been the topic of many discussions.

Forms 3509 and 3510 also appear to be in response to the SBA’s PPP Loan FAQ #31 and FAQ #46.  These questions relate to the Certification and whether businesses owned by large companies have adequate sources of liquidity to support the business’s ongoing operations.

How will these forms affect other borrowers – those with PPP Loans of less than $2 million?  Pursuant to FAQ #46, “Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”  Based on this, it appears that the forms may act as a helpful guide to such borrowers that may have questions regarding loan necessity, but (we hope) nothing more.

The forms include questions related to what the SBA refers to as a Business Activity Assessment and a Liquidity Assessment (“Assessments”).  Attached are copies of the FAQs referred to above.

One of the key points that we saw regarding such Assessments is that the Certification was required to be made at the time of the application and not at any point after that date.  The Assessments ask questions relating to financial activity occurring up through the end of the loan forgiveness covered period (the 24-week period after the date of the loan).

Based on the instructions, the completion of either form is required by every borrower that, together with its affiliates, received PPP loans with an original principal amount of $2 million or greater.  The completed form is due to the lender servicing the PPP loan within ten business days of receipt from the lender.

Since the Forms are not yet finalized, we believe that those with PPP loans of $2 million or more should at a minimum start formulating how they would respond to such a request.  For all recipients of PPP loans, we suggest that you document why you believe that you were able to make the Certification if ever asked for such information.

As always, we are available to help. Please contact us at 631-368-3110.