Real Estate

During the height of the COVID-19 pandemic, many Atlanta businesses were struggling to maintain operations while navigating uncertainty, new safety regulations, and an assortment of government-issued restrictions. One of the federal relief programs offered to help offset the hardships, the Employee Retention Tax Credit (ERC), provided a much-needed cash boost to business owners. However, when the program unexpectedly came to an end 3 months early (end of 3rd quarter of 2021) it created an issue for those who were not expecting to pay employment taxes. Unfortunately, the withheld amount became due, and many employers were simply unable to repay it. Since December 2021, the IRS has been providing relief to these taxpayers and those who filed an amended return but has yet to receive a refund.

The Paycheck Protection Program (PPP) was an invaluable tool that helped many Atlanta companies manage through the COVID-19 pandemic. The loan program, which was initiated through the CARES Act, offered funding designed to keep operations going through government orders and restrictions. It even included a forgiveness option assuming funds were used on certain expenses including payroll, rent, mortgage interest payments, and more. The PPP was so successful there was a second draw option available for the hardest hit. In fact, Georgia companies alone received over $11B in PPP loans.  

Dealing with the Internal Revenue Service (IRS) can certainly be a challenging endeavor for Atlanta individuals, businesses, and organizations. There are numerous notices that are sent including those requesting additional information, notices of balances due, changes in refund amount, questions about information on the return, or notifications about delays in return processing. Although part of standard operating procedure, the significant backlog of unprocessed returns (and other communications) has resulted in inaccurate automatic notices being sent. The combination of budget constraints, staffing shortages, and worker shortages, has created a “perfect storm” at the IRS. In fact, the volume of unprocessed returns includes 2.3M unprocessed amended individual returns and 2M unprocessed employee quarterly tax returns. Although it will be some time before unprocessed returns will be addressed, new steps are being taken to relieve issues caused by inaccurate automatic notifications. The IRS recently announced a temporary suspension of over a dozen IRS notices, including automated collection notices.

Cyberattacks are more prevalent than ever.  Unfortunately, it is not a question of if an Atlanta business will have to deal with one, but when. Hackers continue to look for new ways to take advantage of organizations and often accomplish that through unsuspecting and unprepared users. While this most commonly occurs through email phishing or some other form of deception, it is now also taking place within business software as well. More specifically, there has been an alarming increase in the past few months in the malware found within Excel add-ins. These useful additions provide professionals with the additional data management capabilities necessary to completed advanced analysis. Unfortunately, they also carry risks.

Beginning in January 2022, companies looking to claim a refund under IRS Section 41 – better known as the federal Research and Development tax credit – will now have to supply more documentation. Outlined in Office of Chief Counsel Memorandum – 20214101F the extra information, which must be submitted with the annual tax return, is expected to help process R&D credit refunds faster and more efficiently.  Now that the IRS has issued guidance for the new requirements, businesses claiming the credit can work closely with providers to ensure the proper documentation is submitted.

The chaotic situation which followed the arrival of the pandemic created significant financial challenges for many Atlanta businesses. The variety of government orders combined with public concern about transmission changed the business landscape virtually overnight. The shift meant many businesses needed new and immediate capital infusions to make it through the transition. The Employee Retention Tax Credit (ERC) which was implemented as part of the CARES Act was one of several programs designed to help. Along with other federal relief programs, many were saved from financial uncertainty.

Now that the pandemic has passed almost all these programs are no longer available. In fact, the recently enacted Infrastructure Investment and Jobs Act called for an early end to the Employee Retention Credit. The only remaining program is the Economic Injury Disaster Loan (EIDL) which is set to expire at year-end. Earlier today, the SBA announced new guidance to help small businesses that are considering applying for a new loan, targeted advance, or supplemental advance.

Atlanta businesses required to undergo an annual financial statement audit will notice several new changes to the auditor’s report. Outlined in the Statement on Auditing Standards (SAS) 134 – Auditor Reporting, the modifications are designed to increase the value of the report to management. The changes have been years in the making – going back to 2011 when the Accounting Standards Board began the path to more consistent auditing standards for all entities. In 2015, the Public Company Accounting Oversight Board (PCAOB) and the International Accounting Standards Board (IASB) made changes to auditor report requirements, which paved the way for SAS 134. Much like other standards updates, the changes outlined in SAS 134 will help to make the auditor’s report more useful and transparent to financial statement users.

Many Atlanta businesses have already started the process of complying with the new ASC 606 Revenue Recognition standard. Originally scheduled to become effective earlier, the Financial Accounting Standards Board (FASB) voted to delay the implementation one year due to the COVID pandemic. As the implementation deadline approaches many businesses are working through the steps of examining contracts to identify where revenue recognition changes may need to be made. While there has been extensive guidance and information made available on how to identify, assess, and report revenue recognition changes, including the 5-step process, fewer details are available on how to account for revenue-generating contracts in a business combination.

For many years there has been concern about the accuracy, consistency, and quality of ERISA plan audits. Originally introduced as part of the Employee Retirement Income Security Act (ERSA), the audits are designed to ensure plans comply with established governance, financial reporting, and other standards. The depth of the problem came into focus when the DOL published, Assessing the Quality of Employee Benefit Plan Audits in 2015. In the report, it was found that 40% of audits contained major deficiencies. The report was full of such unfavorable findings which called into question the effectiveness of both the audit standards and firms providing the service.