Law Talk with the Flock

PPP Loan: Be Cautious About How To Spend Your Loan Appropriately

May 20, 2020 Jeana Goosmann, Jeremy Vokt Season 1 Episode 14
Law Talk with the Flock
PPP Loan: Be Cautious About How To Spend Your Loan Appropriately
Chapters
Law Talk with the Flock
PPP Loan: Be Cautious About How To Spend Your Loan Appropriately
May 20, 2020 Season 1 Episode 14
Jeana Goosmann, Jeremy Vokt

Host Jeana Goosmann and guest Jeremy Vokt, CPA and Managing Partner for Bland CPA in Omaha, Nebraska, talk about how business owners have been impacted during COVID-19 and how their CPA can help. Jeana and Jeremy talk about various ways businesses can continue to operate during COVID-19 and post quarantine. They discuss the paycheck protection program funding and loan forgiveness. During this episode you will learn:

  1. The issues CPA's are seeing during COVID-19.
  2. Advice for business owners and leaders.
  3. How your CPA can help.

Learn more about these topics at Goosmann Law Firm's COVID-19 Resource Toolbox. All resources regarding COVID-19 are posted there by our Rapid Response team.

Become a flock fan and subscribe to our Podcast for weekly episodes! Learn more at www.goosmannlaw.com.

DISCLAIMER: The information in this podcast episode “episode” is provided for general informational purposes only and may not reflect the current law in your jurisdiction. By listening to our episode, you understand that there is no attorney client relationship between you and the Goosmann Law Firm “GLF” attorneys and podcast publisher. No information contained in this episode should be construed as legal advice from GLF or the individual author, hosts, or guests, nor is it intended to be a substitute for legal counsel on any subject matter. Please read our full Podcast Disclaimer.

Show Notes Transcript

Host Jeana Goosmann and guest Jeremy Vokt, CPA and Managing Partner for Bland CPA in Omaha, Nebraska, talk about how business owners have been impacted during COVID-19 and how their CPA can help. Jeana and Jeremy talk about various ways businesses can continue to operate during COVID-19 and post quarantine. They discuss the paycheck protection program funding and loan forgiveness. During this episode you will learn:

  1. The issues CPA's are seeing during COVID-19.
  2. Advice for business owners and leaders.
  3. How your CPA can help.

Learn more about these topics at Goosmann Law Firm's COVID-19 Resource Toolbox. All resources regarding COVID-19 are posted there by our Rapid Response team.

Become a flock fan and subscribe to our Podcast for weekly episodes! Learn more at www.goosmannlaw.com.

DISCLAIMER: The information in this podcast episode “episode” is provided for general informational purposes only and may not reflect the current law in your jurisdiction. By listening to our episode, you understand that there is no attorney client relationship between you and the Goosmann Law Firm “GLF” attorneys and podcast publisher. No information contained in this episode should be construed as legal advice from GLF or the individual author, hosts, or guests, nor is it intended to be a substitute for legal counsel on any subject matter. Please read our full Podcast Disclaimer.

Goosmann Law Firm:

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Jeana Goosmann:

Hi, I'm Jeana Goosmann, your host for Law Talk with the Flock CEO, lawyer and business owner here to help navigate you and your way through the law, your business, and life as a leader. I am super excited to have with me here today a guest on the podcast. I have with me CPA, Jeremy Vogt, and he comes from Omaha, Nebraska and he is one of the managing or the managing partner of Bland CPAs in Omaha. Welcome Jeremy.

Jeremy Vokt:

Thanks. I appreciate you having me on today.

Jeana Goosmann:

Absolutely. I'm so excited to have you on as my guest and talk a little bit about everything that's been going on and all these changes that we have in COVID-19, and I see you're working from home. So way to go on social distancing.

Jeremy Vokt:

Yeah, I'm trying, I'm trying . I mean I got kicked off my kitchen table to the basement yesterday, so between myself and three kids trying to work at home. Yeah, I get the whatever's left, I guess of the house.

Jeana Goosmann:

Well it looks like you have a door behind you, so that's a start.

Jeremy Vokt:

I'm sitting by , I actually, I'm sitting behind the bar, so I thought I'd better change it around and not sit in front of the bar. So yeah .

Jeana Goosmann:

Well, you know, maybe we'll end the podcast and you can give me a toast of some sort. So that sounds good. And you have a finished basement. So I've had a lot of phone calls with people in their unfinished basement to find a spot. Exactly, exactly. So lots of changes and definitely in your world as well. And I know you help a lot of business owners and at your company, maybe we could just start by giving everybody an overview of Bland.

Jeremy Vokt:

Yep . So Bland. We are a CPA firm in Omaha, Nebraska. We're about 90 people. Really we're almost two distinct type of divisions within our firm right now. One division of our firm we do government contract with the contracting with the Centers for Medicare and Medicaid Services. So CMS, we do a lot of Medicare auditing, fraud, waste abuse, auditing, monitoring, and oversight and new payment models for CMS. It's kind of separate from maybe what I call the local business. Local CPA firm as you would know it within the local CPA firm being in Omaha, a wide range of industries, construction, real estate , services, technology, nonprofits. Being in Omaha you get a little bit of everything, not really one industry. So we get to see a little bit of everything here in Omaha. So serving all different types of clientele from startups to billion dollar companies and everything in between. So really our specialty is probably that closely held family-owned business here in the Nebraska area.

Jeana Goosmann:

And you're one of the leaders if not the leader of the firm, is that correct?

Jeremy Vokt:

Yep. I'm the Managing Partner of the firm. Correct. What an interesting time. Oh, very interesting time. I'm doing nothing right now that I went to school for the clean planning between the, closing the office cause the pandemic and now planning to reopen the office cause the pandemic . So it'll be really nice for us. Obviously, all of us to get this behind us at some point. But , our team has been great. They've been resilient through all this. No different than a lot of the people, you know too . And a lot of employees being here in the Midwest are very resilient with all of this, so.

Jeana Goosmann:

Absolutely. Well that's great. And I agree with you. I've had a lot of people tell me as a Managing Partner of a law firm, you never thought you'd be dealing with a global pandemic. I'm like, nope, but nobody did it. Nobody else did either. So we're all just doing the best that we can, aren't we?

Jeremy Vokt:

Yup . They're not a flag .

Jeana Goosmann:

Take it day by day . So let's talk a little bit about what kind of issues are you seeing with those business owner clients and what are some of the concerns that you're hearing about out there?

Jeremy Vokt:

I mean, obviously, I mean, besides the pandemic to the side, the number one issue is all centered around the PPP loans. That's all we've been focused on for the last, what's it been now, seven or eight weeks now. Really it's almost coming to phases that you would know in your world too . I mean, first it was, it comes out on a Friday night or Saturday morning was understanding the law, the act, what's out there, seeing the PPP loan and understanding the calculation of the loan and then all the different variations and everyone's interpretation of the calculation of the loan and then applying for the loan and banks going about it again, they had very little guidance so they had to try to get up and running on that and how to apply for it. And now it's all about how do we spend it and get it forgiven appropriately. And as you see in the news, that's changing by the day via Twitter and newscast. Right now, you got secretary Munchen saying different things that are not in the law right now, that are they going to be in the law? How are they going to interpret all that? So kind of a little bit of chaos within this program right now. So that's what a lot of time they're spending on right now.

Jeana Goosmann:

You bet. Well, the PVB is such a huge thing for business and I know they're right there for the cares that came out. There was all this conflicting information so that you say it came out on that Thursday, Friday and I was like, that's how I spent my weekend reading those 1200 pages in this section by myself. I'm like, I can't rely on these other summaries. They're confusing. They're saying different stuff. I just had to dive in. But now it's tricky because they're doing after the fact interpretations and if they don't necessarily drive with what the law has to say and it can be really frustrating.

Jeremy Vokt:

Exactly. Very frustrating. And then of course your client hears something, right? I mean, Oh, I was told this right here, this, or you see this on the news and when I saw the SBA, I can't remember which field office or which region tweeted out the other day that on the loan forgiveness piece, any calculator you see out there as pure speculation, they have not even given guidance on what that may look like even though it's pretty broad in general. And it's quote unquote easy to calculate according to law right now. But it's also difficult because it's so broad. So they haven't even given any guidance on how to forgive it technically yet with the calculator. I was just on the FAQ site here before our call and it's still not out there. And I've got clients that are almost six and a half weeks or five and a half weeks into having their loan. So what do you do here? So that's , that's the biggest issue we're facing right now is how to spend it appropriately for forgiveness.

Jeana Goosmann:

And when people are trying to make business decisions and they're kind of doing it in a vacuum where they don't have clear guidance. And then after the fact they go , what are the things that came out that I saw recently was the IRS is now going to disallow the expenses that people pay with the PPP money, which essentially almost has the same effect as taxing the loan forgiveness.

Jeremy Vokt:

Yeah, I mean it's somewhat makes sense. I mean if you're not going to tax the loan, why are you going to let someone kind of quote unquote double dip and then you know, deduct those expenses. I guess I can understand that, but yeah, that was new clarification that again, they just missed it when they passed it. Right. So what else is going to come out obviously over the next six months here before your end too .

Jeana Goosmann:

I'm one of those people crossing my fingers that they reversed that decision. I know that Senator Grassley has some legislation pending. I'm like the first time I'm like go pass that because he'll make a huge difference on, you know , what people are able to do if they tax it or not at the end of the year.

Jeremy Vokt:

So yeah, I think so too. I think so too. I think it'll be enough pressure on that potentially as well.

Jeana Goosmann:

But again, that's just another thing that's, there's a lot of uncertainty around it and as people are trying to make sure that they're doing the best that they can. As far as tracking their expenses and different things like that. I know some folks who've set up separate bank accounts for their PVP money and what they're spending out of that. And are you seeing different things like that as well?

Jeremy Vokt:

Yeah, I had some clients that, you know, obviously it says some of the guidance says, Hey, wouldn't it be nice if you set up a separate bank account but you don't necessarily do it on everyone's GL and accounting software can track the expenses. At the end of the day, you have what, five buckets of expenses you can spend this in right now. So you can easily track that. You know, some of the biggest things out there in terms of how you track it though is, you know, it says payments. Is it a crude payment? I mean, can you recruit things and expenses? Do you have to make a payroll on the 60th day to make sure you maximize, you have to pay your rent on that 60th day to make sure you maximize. Again, things that just aren't quite clear yet that people only have, some of my clients only have like two and a half weeks to make this decision and it's crazy. So, and someone was like, can you make catch up payments too? I've had that question and that's not clear either. I don't think is it, or prepaid or prepay. You know, if I've got 25% that I can spend on rent and utilities, why would I not prepay rent if I have to to maximize that 25% or push up a payroll or whatever it may be. I mean, there's just, there's ways of quote unquote take advantage of it that now they're kind of seeing that and they really don't want people to take advantage of that. Right. I mean that's kind of what they're saying. So it's back and forth.

Jeana Goosmann:

Well then if people got over $2 million or something, they're gonna for sure audit those folks somehow.

Jeremy Vokt:

Again, that's not a tweak . I mean it's not, it's not the law . It's not the regulation and it's on the tweet . So again, yeah . What's that mean? So then you put clip here to put the fear of God into somebody that they might be audited. Cause I had this, okay, well technically if you use the funds right, it's not a big deal, but you're going to have someone come snooping at your funds here in the next year or two years whenever they can even do that. I mean, and how they're going to do that. I don't know either. Cause right now it's not the bank. I mean, right. The SBA said bank , you're held harmless. We're not going to mess with you. At least right now it's going to be on the SBA. So what are they going to do? Just don't know yet. Just a lot of unknowns still.

Jeana Goosmann:

It's certainly a crazy time as far as all these different things go and other than the PPP or other issues that business owners are coming to you about. I know a lot of them too, haven't even filed their 2019 taxes. Right? Cause that's essentially until July, and they're waiting to figure out what do they need to do for their estimates because the estimates aren't due yet either.

Jeremy Vokt:

So there's , there's one thing around that that 2019 return that I kind of jotted down here today too for that is along with the Cares Act, they clarified a tax law. It was qualified improvement property. What that means is some of that 39-year property that you would depreciate it for 39 years, they changed it because there was a loophole in there. So it'd be 15 years. So obviously a quicker depreciation right there and they're going to allow you to go back and do bonus and that quicker depreciation for 2018 and 2019. So now all of a sudden you have companies that maybe have filed the return for 2019 and 2018 obviously have to go back and amend those two returns, take advantage of that to then if it's a flow through. Okay then I've got to amend your personal return to get that potential refund back or those taxes back or maybe that credit for the next year or so. We're going to start to see a lot of that right now because you haven't until September 30th knew all that. So to take advantage of 2019 and then 20 potentially have some clients who maybe didn't file yet. These real estate partnerships, I might have three years of returns to do right now to take advantage of that and not let alone go back and refile and amend all the personal returns for that depreciation deduction. That doesn't mean that that ends up being real money. Granted, you may not see that if you say you do it on September 30th you may not get those refunds for what January. I mean just depends on backlog. The IRS has to get that.

Jeana Goosmann:

Interesting. So how has this affected you in what was traditionally known as your busy season?

Jeremy Vokt:

So we got through, I was curious about , cause we only shut down the office about the middle of March. Right. I mean in the heat of it and looking at least numbers wise in terms of returns wise and revenue wise. Everyone stayed pretty busy at that point but we kind of kicked the can on this whole amending these returns right now as well. So now the team's going to be very busy because we do a lot of real estate work in terms of even other clients that maybe just own their own building going back and maybe amending some of those returns right now as well. So they are going to be plenty busy now until July 15th which is somewhat odd for a CPA firm for those tax people to stay. All the tax people stayed that busy for that long of time. So they will be in for their taxes not quite over yet. So that'd be good for them .

Jeana Goosmann:

Might suffer a little bit.

Jeremy Vokt:

Yeah. Right. I'm sure we'll figure out a way. I mean, as with everybody, I mean everyone's golfing and working at different times right now and doing activities that are print time . So everyone's work day is changing for sure.

Jeana Goosmann:

Lots of changes. Well, thank you so much, Jeremy, for joining me this afternoon on Law Talk with the Flock and providing your insight and your wisdom and really appreciate you being a guest. And I want to thank everybody for listening and go ahead and go make it worth it and stay safe.

Goosmann Law Firm:

Thanks for joining us for Law Talk with the Flock by Goosmann Law Firm. We hope you feel energized and ready to soar past your goals. Become a flock fan and subscribe to our podcast for weekly episodes. Learn more at goosmannlaw.com.