ACT Responsibilities with Respect to COVID-19 Related Services
Over the past few weeks, our country has been battling the COVID-19 virus along with its devastating impact on our economy. During this time there has been considerable federal and state legislation along with executive orders attempting to address deferred filing and payment responsibilities, access to expanded sick leave, obtaining unemployment benefits, economic stimulus payments, employment related tax credits, and business loans. Most recent examples include the Families First Coronavirus Response Act, and the massive 880 page Coronavirus Aid, Relief, and Economic Security Act.
Arnett Carbis Toothman LLP (ACT) has spent considerable time and attention to following these changes. Admittedly, it has been, and continues to be a challenge in that, announcements, rules, and guidance issued subsequent to passed legislation often varies from the original statute. Further, there is considerable “promised” guidance that will likely not be issued prior to required action. For this reason, we felt it best to clarify the nature of services we are providing and our mutual responsibilities relative to recent tax and business law changes dealing with COVID-19.
You may ask us for advice and consultation relative to implementing provisions arising under the Families First Coronavirus Response Act (CRA), the Coronavirus Aid, Relief, and Economic Security Act (CARES), and/or possible application for various loan programs. These loans programs might include:
- Paycheck Protection Program (PPP) loans
- Economic Injury Disaster loans (EIDL)
- Economic Stabilization and Assistance Loans
While we may provide you with advice concerning these matters, you will retain all authority and responsibility for making any decisions based on our advice.
The majority of responsibilities, ours as well as yours, are found in our annual engagement letter, and the accompanying Standards of Services in Tax Matters. If you need a copy of either, please let us know. This communication is not intended to alter terms, but merely to reiterate and clarify those responsibilities.
We have not and will not investigate or verify any facts underlying the transactions reported on PPP or other loan applications or tax filings unless specifically agreed to as part of a new engagement letter or written scope of services. We will rely on the financial and other information that you provide us. If the actual facts are different from the facts represented to or understood by us, or if there are other facts of which we are not aware, information reported on tax returns, or in a PPP loan application may be in error.
As previously indicated, the rules surrounding COVID-19 initiatives are changing seemly by the day, if not hour. Subsequent changes to applicable law or regulations, or the issuance of new case or ruling authority, could materially and adversely affect loan requests under the Paycheck Protection Plan and/or calculated tax credits. While we will attempt to monitor changes in law and regulations and advise you accordingly, ACT assumes no formal responsibility to apprise you of changes in law subsequent to the date of the services rendered.
Many areas of tax law are unclear, and the application of the tax law to any particular facts may be subject to more than one interpretation. Our Tax Advice will be based upon our interpretation of applicable law and regulations and certain case and ruling authority as of the date of the Tax Advice. The level of assurance for any particular item of Tax Advice will depend on the underlying facts, the clarity of applicable law, regulations, case and ruling authority, and the extent of factual due diligence and tax research performed. The conclusions in our Tax Advice will be based on our good faith belief that they meet the level of assurance stated in the Tax Advice. Obtaining Tax Advice at a particular level of assurance may in some cases provide a defense to certain tax penalties, but you should not assume that an item of Tax Advice will offer you protection from penalties except as expressly stated in the Tax Advice.
Any definitive advice concerning any tax matter or loan application depends on the particular facts of your unique situation, as well as the law and related authorities (
regulations, case law, rulings etc.) that apply to those facts. Our professional standards require that we exercise appropriate due diligence in providing professional advice, taking into consideration the scope of our engagement and the type and specificity of the advice that you request. This due diligence may require review or confirmation of certain facts and research concerning applicable tax authorities. All definitive advice that we provide concerning COVID-19 matters must be in writing in the form of a letter or a memorandum.
We are happy to discuss with you our views regarding the tax and other incentives available as part of COVID-19 legislation. We may also provide you with tax information in the body of an email.
We will exercise due professional care and judgment in the performance of our services. We cannot, however, warrant or guarantee the potential benefits that may be derived through recent COVID-19 legislation.
Unless contracted to the contrary, and the subject of a separate engagement letter/scope of services, our services will be limited to offering advice and consultation. We should not be viewed as an agent for our clients or its lending institution.
In an effort to provide general advice on COVID-19, ACT has been sending out eblasts, and has devoted a section on our
to these matters. We would encourage you to review these resources for information and updates.
If you have questions about this correspondence, please do not hesitate to contact your ACT representative.
Arnett Carbis Toothman LLP