AICPA Town Hall Series – Sept 24 Edition

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AICPA Town Hall Series – Sept 24 Edition

Good afternoon and welcome to the AICPA Town Hall Series We greatly appreciate being with you As usual, we got a lot to update you on, so let’s get right into it But first, let me just cover a couple of housekeeping items I think you’re all very familiar with this platform You’ve got this toolbar at the bottom where you can ask questions You’ve got that orange down arrow where you can download the materials We’ve got a whole list of frequently asked questions there You can ask us questions We ask you to take a look at the FAQs first, and yes, you can earn CPE If you don’t get the CPE certificate at the end of this session, don’t worry, you’ll receive an email with information on how you can receive it Now let me introduce today’s panelists First-off, I’m Erik Asgeirsson, the president and CEO of CPA.com, AICPA’s business and technology subsidiary With me are Rohit Arora, who is the founder and CEO of Biz2Credit He is frequently talking about businesses and financing issues on Fox News, and CNBC Welcome, Rohit. Great to have you with us Yeah, thanks We’ve got Kari Hipsak, who’s one of the leaders putting together all of these resources that we review on a weekly basis She’s filling in for Lisa Simpson and she’s going to be providing some great updates related to some of new resources that we’re going to make available to you shortly We also have Jagadeeswara Konikanti, who is going to be doing a demo of the PPP Forgiveness Tool In many ways this is a special edition, we talked about last week, how we’re going to be doing a deep dive on this forgiveness tool, so I look forward to having Jagadeeswara do that for us Then we also have a practitioner with us here this week as we do many weeks Travis Miskowitz, is with us from Wiss, and Wiss is a top 100 firm based out of the Northeast He’s going to be providing us insights on how Wiss is managing the forgiveness process Welcome everybody Here’s the agenda We always start off with a quick recap of the recent town halls and FAQs Then we’re going to share with you some broad updates on what’s happening in Washington DC Then we’re going to really go deep into this forgiveness tool, and then we’ll close out with the practitioner’s perspective and the open forum where we’ll take your questions Kari, let’s just start off with a little bit of reflection on the recent town hall series and the FAQs Great. Thank you, Eric I’m so grateful to have the opportunity to be back with all of you while our team had to divide and conquer this week I’m going to jump on in with a look at the recent town hall series We’ve highlighted the topics that were covered in the various town halls for your reference If there are any particular topics that are keeping you up at night, it may be helpful to go back and watch one of these archived recordings If you download the attendee documents, each of the dates are hyperlinked to the recording, or you can find all the archives at AICPA.org/SBA with the rest of our PPP resources Moving onto the next slide, I would like to acknowledge the frequently asked questions from town halls and provide some additional insights into key areas I’ll start off at the top of the list with accounting We’ve seen a number of questions about accounting for PPP loans come in and are also starting to see an up-taking questions related to the auditing of PPP loans as firms are starting to look at and plan for 2021 For those looking for guidance on the accounting and auditing side of PPP, I’d like to mention the AICPA’s a Center for Plain English Accounting, also known as CPEA The CPEA serves as a national ANA Resource Center for PCPs member firms, providing reports, technical answers, support, and even training They’ve recently released a report about auditing PPP and if you’re interested in learning more, please go to AICPA.org/CPEA Moving down the list, I’d like to take a few moments to discuss the FAQ regarding the covered period Some borrowers may have needed more than eight weeks to spend the PPP funds on eligible expenses, but also didn’t need the full 24 weeks Borrowers are permitted to apply for forgiveness before the end of the covered period However, this doesn’t change the length of the covered period For example, if a borrower applies for forgiveness at 20 weeks,

their covered period is still defined as 24 weeks The most significant discussion surrounding this topic is the prorated maximum eligible compensation per employee It is our understanding from SBA that due to a sentence on page 2 of the forgiveness application instructions, maximum compensation will be pro-rated for the period of time that has passed from the start of the borrowers covered period to when the application for forgiveness is submitted This line I reference states, for each individual employee, the total amount of cash compensation eligible for forgiveness may not exceed an annual salary of $100,000 as pro-rated for the covered period If a borrower applies for forgiveness at 20 weeks, the maximum eligible compensation for each employee is $38,462 instead of the $46,154 if the borrower applied for forgiveness at 24 weeks This amount is determined by taking 20 divided by 24 and multiplying by $46,154 Another component of applying for forgiveness before the end of the covered period is that any salary and wage reductions must still be extrapolated over the full 24-week covered period If there are any salary or wage reductions when a borrower applies for forgiveness at 20 weeks, the final calculation of the salary or wage reduction, which will reduce the borrowers amount of PPP forgiveness, will be determined by multiplying the dollar amount of the reduction by a 24 week covered period, so the full covered period, and the individual’s average weekly hours On the next slide, we have additional town hall FAQs Let’s start with the tax discussion The deductibility of expenses paid with PPP funds is still being discussed as Congress continues to work towards another smaller coronavirus relief package Also related to tax is the question of if it’s time to file a tax return, does the borrower deduct expenses while waiting for determination of forgiveness? There are options that are best to discuss with clients, and I prefer not to get into the details as Ed Karl, Our AICPA, VP of tax policy and advocacy, dove into this topic on the August 20th Town Hall As I mentioned earlier, this archive is available in the materials or at AICPA.org/SBA Another item to note in the tax category is an IRS notification to lenders, which came out on Tuesday and indicated that lenders should not file a form 1099-C for cancellation of debt information returns or furnished payee statements to report the amount of qualifying forgiveness with respect to covered loans made under the PPP A Journal of Accountancy article, which was published on Tuesday, goes into details Moving down the list onto the FTE reductions, direction has been shared from the SBA through their support center Based on responses from the SBA, banks have provided statements indicating that final FTE reductions will be measured at the earlier of the end of the covered period or the date of the forgiveness application We may get additional guidance on related party rent, but haven’t yet On a final note related to the FAQs, discussions about a streamlined forgiveness process for loans under a certain threshold are ongoing This topic in particular was discussed this morning when Treasury Secretary, Mnuchin, gave a testimony to the Senate Banking Committee While streamlined forgiveness remains a work in progress, Mnuchin did state he would recommend that a small business with $140,000 loan should go ahead and apply for forgiveness Eric, I will turn it over to you Yes. Thank you for taking charge So there’s a lot there The FAQ list keeps getting longer and longer, but it does seem that we’ve gotten clarity on almost everything, even this final big question are related to how FTE reductions work, Bennie, and applying for forgiveness before the end of the covered period So that one was a big outstanding one and it seems that now the direction is the obligations do end on the date of the actual file filing of forgiveness So we’re trying to get, really clear clarification on that, but the banking community has been, sharing that information with us based on some of their discussions with the SBA

We’re highlighting this slide this week, the key stakeholders that we are very engaged with, and we are actually very engaged right now with the Treasury and SBA and the policymakers on what’s going to happen with this next phase of business relief I’ll be speaking about that in a moment We’re having lots of discussions with the lending community and the payroll community, and I’m going to share some of those insights as well One article that we want to highlight to you that’s in the Journal of Accountancy is an article actually that Kari authored, and it really talks about what are some of the key elements around PPP loan forgiveness right now, she did a great job of sharing that example of applying earlier and having to do the prorating of the eligible payroll cost amounts That’s all highlighted in this articles So take a look at it Regarding the lending community, they really are beginning to stand up their forgiveness applications, and they are starting to submit forgiveness applications back to the SBA We’re not aware of any action by the SBA on any of these submitted applications yet So that’s something that is all in process The SBA does have 90 days from when the lender submits it to get back to the lender So there’s some anxiety around this process and there is a lot of confusion on how these forgiveness applications are going to get put together for all of these borrowers We think the firms are going to play a huge role here and we’re going to be talking about some of the capabilities that which we think will help the firms do that then finally, you already heard from Kari, there was a lot of testimony this morning by Chairman Powell and Secretary Mnuchin and I’m going to talk about that as I just cover where do things stand with the policymakers This slide this week, all we’re talking about is the extending of PPP or PPP2 There is just tremendous pressure to get something done We all know that the political climate is so heated, 40 days before the presidential election, with the Supreme Court nomination discussions, but this is a top of mind of all of the Democrats and the Republicans So real quickly, you had the Democrat HEROES Act, which passed many months ago Then, we had the Republican HEALS Act which was passed by the Senate in July and what everyone is trying to do is to come to a compromise between those two acts Last week, we talked about the problem solvers, and that’s a group of Democrats, Republicans and they had submitted this $1.5 trillion plan There’s now new discussions that the House of Democrats are going to put forth a plan that is small, there is a typo here, it’s not 2.4 billion, that’s 2.4 trillion, a $2.4 trillion proposal over the next week There’s also discussion of some type of parliamentary procedure called a discharge petition to extend PPP So everyone’s trying to figure out ways to get something done In two weeks, we’re actually going to have Congress from Fletcher, a Democrat from Texas join us, and hopefully by then we’ll be very close to getting some type of extension or PPP2 put in place We’re optimistic. We’re getting ready for it We know that the business is needed So we’ll talk a little bit more about that as we get to the end of today’s presentation What we want to pivot to now is we want to spend the next 20 or 30 minutes and do a deep dive on the tools that firms can put in place to support the forgiveness process Before we do that, I just wanted to reflect on the complexity around PPP We’ve been on this journey with you for the past six months It’s been a six month journey now Every week, we talk about the most recent FAQ or the most recent IFR, but there’s so much that has been done over the past six months that it is really almost impossible for you to keep everything in your head You need to use processes and capabilities to manage this Just like you would use tax software to do

a tax return or an audit platform to support your audit business, and that’s basically what this whole category is evolving into, this business relief category, firms have dedicated staff, as we heard last week from Greg Anton Now due to everything that you see in this slide, we know firms are going to be putting capabilities in place When we talked about these capabilities, a lot of times firms tell us, they send us emails, or I speak to a firm they say, “But my bank says the client is going to have to use their forgiveness online application.” The answer to that is yes In many, many, many cases that is how the forgiveness application process will work, but we’ve been talking to firms about, is how do you manage this for many clients and how do you have some type of central repository where you put all this information together? There are many, many lenders out there and you want to make sure your clients are getting the right forgiveness treatment So this tool that we’re going to talk about could serve as a real check and balance for the firm to manage this process We do know that the lenders are interested in receiving the output from this tool At the end of this presentation, we’re going to show you a slide that shows you the ZIP file that you will be able to provide to your client, and your client will be able to provide that to their lenders So we announced the enterprise version of this tool this week I want to bring back Rohit and Kari to join me for the next part of this discussion This highlights the capabilities that I’ve just been discussing This enables firms to manage multiple clients You’re going to see some really interesting capabilities and how this uploads the payroll data It automates the filling out of the 3508 or 3508EZ, does the e-signature, incorporates all of the guidance and recommendations that the AICPA has been putting out over the past six months and we’ve been talking about weekly on these town halls As always, we put a lot of slides in here for reference So here’s another reference slide, and these are some of the key capabilities I think I’ve already mentioned most of them I didn’t mention the bulk upload of client information, but you’re going to get to see some of those capabilities in a moment when we do the demo What I’d like to do now is to have Kari come back and talk about the integration of the AICPA forgiveness tool into this overall platform This forgiveness calculator has been downloaded thousands of times but that in itself isn’t enough to do the forgiveness process But anyway, Kari, I’ll let you talk about how this works and a lot of your input and direction helped develop this feature. So Kari Great. Thank you Eric On this slide, you’ll see it’s called AICPA Calculator Parsing and the purpose of this is to help users who may have already used the AICPA forgiveness calculator and Excel or might choose to use it, and then upload directly to this forgiveness tool So when it comes to the phrase parsing, for those of you that may be unfamiliar with it, the idea of parsing is basically just an information mapping The tool will take the AICPA forgiveness calculator, and map the information in those cells to the correct cells in the platform One thing that I especially want to make note of with this is, is we do work with Bestow credit and send any updated spreadsheets their way To ensure that the parsing works correctly, please ensure that you have the most updated forgiveness calculator, if you choose to use that, and then upload through the tool The tool does have a link to the calculator as well So that is one thing to keep in mind Another thing we’d like to mention in regards to the calculator is that this week we did release a new resource If we could move to the next slide, I’ll give you a little example Kari, one question that’s coming in Is there many versions of the calculator? That’s a very good question People will always be utilizing the most current one. So yes Let me forward your slide and you can maybe answer that question as well

Yes, absolutely. So we did have a number of versions of the calculator, simply due to new guidance that came out, new interpretations that we learned from the SBA Also the main calculator, has really been a team effort across the profession So if I was made aware of any formula errors or user issues, I would fix those and a new version would be updated and released on the website So please make sure when you are using the resource, you take note of the date that is on the upper left-hand corner and if you’re having any issues, that will be the first thing that we’ll ask, is what is the date on the upper left-hand corner That is one thing to keep in mind with that calculator and that we have a new resource, the FTE calculator and you’ll see a similar example I didn’t take a screenshot of that, but you’ll see the date up on the left-hand corner for this tool as well This one is dated as of today The purpose of this calculator is simply in response to a lot of feedback that we got from borrowers, saying that the FTE calculation was very complex and we absolutely agreed with you and the team, put our heads together and we tried to work through an example of the FTEs all the way from the beginning covered period versus comparative, period analysis through the second safe harbor, and after we did all that work, we figured, let’s just make it a little more automatic and release the tool for all of our members So you’ll see here you can enter employee details similar to the regular calculator for those of you who have used it, the blue cells are the input cells that you can go ahead and enter your employee details and then enter the average number of hours per week The calculations for the covered period and the comparative period are done twice Within the loan forgiveness instructions, there are two options for calculating FTEs The first is is simply take the total hours divided by 40 and then you’ll have a percentage of an FTE if they had less than 40 hours, and there is no way to go over one as an FTE So if you have someone that tends to average 50 hours, they are still kept as one, and the second option is a simplified method where it simply says anyone with 40 hours or more counts as one FTE and anyone with less than 40 hours counts as 0.5 FTE So the spreadsheet will do both for you and then it will show you the comparative period in the covered period analysis with both options, there’s a place to enter FTE reduction exceptions as well, and then you’ll have your final adjusted change in FTEs, and then you’ll see it’ll have results by option and it will tell you next steps, and we can move on to the next slide, which shows A little bit of a pie chart there, but yes Yes. A little bit of extra detail but like I said, the calculator is now available so you can go ahead and download it and get a better look at it But it will go through safe harbor one which isn’t shown here, and is this simple yes or no, check the box kind of a question as if you made it or not Then it will go through to safe harbor two if you didn’t meet the first Safe Harbor Here we did something similar to above, where you can see the different periods highlighted and then enter the average hours per week and it will calculate all that information Then you’ll see down below that we have an analysis again under option A and B and if the safe harbor was met Well, thanks, Gary and when you think about this process and I was on a call earlier today with a bunch of lenders, and banks, and payroll companies, and you look at all the different elements that go into this process You really do need to follow something that walks you through it by client and we’re going to get into the demo here in a second but Robert, I know this is a sign you’ve thought a lot about it Your payroll and other data integrations So why don’t you just kind of at a high-level talk about how this platform is going to do some of this functionality There are two things here. So one obviously, what we have figured out at best to credit, we are a direct PPP lender also So we have a full 180 degree view on what is happening on the customer side as well as on the lender side, and one of the key critical elements has been that how do we automate the payroll data as well as the utility and the mortgage data

So as part of our new enterprise platform, we have given the ability to the CPAs to either upload payroll statements and the data parsing and the data filling will happen in an automated fashion, along with all the calculations, along with the ability to do any API connect with your utility provider We also do the same thing with the bank account also So the idea is that, you could be with any utility or you could be with payroll companies and we will be able to pick your data We are also working with some payroll companies to actually get a direct API integrated into the platform The other thing which is also very important is that as we are making a lot of updates with the AICPA on the calculator We are also working directly with SBA, and SBA is also making some updates into their forgiveness API as we speak, including how to treat the disaster loan, because a lot of clients have taken a disaster loan along with the PPP loan So that calculation and everything, as those updates are being made, we are actually making those updates also so that everything we can keep at the latest version and that’s all we would be able to help to streamline the process as well as to make it extremely accurate Well, thanks Freud. What I wanna do here is just set the stage a little bit Now we’re going go into the demo, but just a little bit of additional background What we’ve done here is and this what CPA.com does from time to time We say we want to help advance a category business relief I’ve been talking to firms in business relief and financing is becoming a practice area of the firm It’s very important, and just like with client accounting services, we put in tools such as, bill.com and practices and processes What we’ve done now is that we’ve taken the AICPA calculator, forgiveness calculator A lot of the recommendations that we have developed over the past many months, and we’ve worked with Bestow credit and we built this platform, and I think this is going to be a great service for the firms and for your clients So with that, let’s just go into the live demo here, show you a little bit about the tool, and then we’ll have a few additional slides talking about some of this functionality as well as we’ll talk about the enterprise and premium support levels So [inaudible] , I’ll let you join us here and do the demo Sure. Thanks Eric Thanks everyone. Good afternoon We’ll quickly go through some of the features which Eric, Gary and Robert have been discussing so far So on Bestow credit portal as we have seen, we have enterprise version plants which will provide you more flexibility in completing enhanced forgiveness applications while it whites submissions So when you login as a CPA or CPA form, you’ll be on a quick dashboard which will show you how many clients have been created, customer profiles have been created in the last couple of 15 days and how many forgiveness applications have been done as well So one customer can have multiple pavilions application So in that scenario at the customer profile level, you can create multiple forgiveness applications here as well So once we get into the forgiveness application, we have the full details about the lender as well as the PPP loan information that is part of the forgiveness system We move on, we have the business details that are part of their 3508 application form that needs to be done and the system also sends out email notification to the borrower to sign the document My next page, we can integrate the bank statements as we were talking through, and the PDF for parsing can also be done, which I’ll show you in the form of a demo First let’s see parsing the ACP calculator The next page we have the easy versus regular application form Once we get into the full application form, we have the ability to download the latest ACP or forgiveness calculator and if you have already downloaded and printed it, you can upload it here So you upload it or just download it You are always clinging to the most current one Once you upload, automatically, it parses through all the information that is there within the calculator and then provides the information here So in this situation, we have two employees who are part of the firm What is their overall payroll amount and what is the reduction because of the reduction in payroll? It also fetches the information about the Safe Harbor and several other information that is part of the calculator As we move forward, on the next page, we will have the total information that is available here So this tool helps very significantly in terms of automatically

filling the forgiveness information from the ACP calculator by directly parsing it That was excellent. Let’s go We might bring you back Jack Voussoir, Rohit and I, we’ll move back and we’ll cover some high-level slides related to the tool but it’s always good for people to see what it looks like, so thank you Sure We’ll just talk real quickly about some of these features that actually have been put in place based on firm feedback But we launched the baby version of this in late July Over 5,000 CPAs and financial advisors have registered for it and there’s been over 10,000 applications done That’s significant because there’s only been 57,000 applications submitted into the SDA So we’ve gained an understanding of what capabilities were desired One user in enroll management allows firms to design the way that users will participate so you can have specific tasks assigned to members of your firm The firms are very familiar with these user enroll management capabilities that you have in other applications You can enter the totals to the payroll expenses You can leverage the calculator and you can also enter information directly Rob, is there anything you’d like to add on this capability? Yeah. Here we are working with a lot of payroll companies and building more and more intelligence into the platform directly The idea is that as a CPA firm, you don’t have to get into the mundane task of calculating the stuff or reading through the reports The other good thing is that all that information that will go into the PPP forgiveness application can easily get transmitted into the next round of PPP application also So the system itself becomes very intelligent It will even calculate in the next round if whether the customer is going to meet the eligibility criteria or not and any updates, any changes that change as I recently mentioned was about how to treat the disaster loan What SBA is doing with APIs will get incorporated Even if there is something to be overwritten or a application has been completed and then something has to be changed, you know, it can get changed and then it will notify the CPA and their customers that it needs to be signed again There’s a tremendous amount of AIML which is already built into the platform As more users use it, the machine gets better and better As Rohit was saying, sometimes a lot of people ask us what the acronyms are, AI, artificial intelligence and machine learning So a lot of sophistication that’s going into this platform One thing that is clear as we continue to understand the forgiveness process is that you really do need the CPA firm Just the payroll part in itself doesn’t identify who the owners are and who the employees are and we all know that the owner payroll calculation is different These are things that if you tell a payroll company then they can run a different payroll report But the firms know this and then leveraging a tool like this allows you to manage those different criteria effectively The FTE reduction calculations are supported through this tool if that was done There’s a process around that and we’ve spent a lot of time talking about that in previous town halls Then just supporting the uploading of documents In Kari’s recent JFA article that she talked about the importance of documentation, we’ve always said it’s important to document when you did the original loan application, to document the reason behind that Actually our practitioner Travis, was on a town hall back in the May timeframe and he spoke about how Whisk went through that process of documentation Well, getting the supporting documentation for forgiveness is also important Even if it’s going to be one of those, quote unquote automatic forgiveness of loans and that that hasn’t been approved yet But if even if that is approved, it is good for the firm to have these corresponding documents because as we’ve as we’ve been saying, there will be third party reviews and it’s nice just to have a clean file Rohit, is there anything you want to add on? I’ll go to this slide and you can just talk about the final package and the uploading of the documents Yeah. The DBA that we’ve designed is that we’re also working with a lot of lenders and especially consolidators

A decent American Banker article like we talked about it, that a lot of smaller banks are selling their PPP loans to consolidators and two of the largest consolidators have already adopted our platform at the backend You will see more and more, if your client has borrowed money from a small bank, the probability of that loan being finally submitted to SBA by consolidator is increasing every single day If that happens, then more and more of them are using our platform, which will be good because it streamlines the process But even if that’s not the case, because most of the large banks are still going to use their own platforms, and SBA allows that now you can actually have a complete PDF package and you can upload that directly into any banking platform The idea is that we will be able to support a zip folder for the CPA firms and their clients and they can just take it from there, run with it and then can upload it or or send it to the banks and at the same point of time can keep a record The other thing is that all loans above two million dollars will get audited, as we have very clearly stated that Then it becomes extremely important that for those audits and when they happen, the borrowers are expected to provide all the supporting documentation and that’s where the CPA firms will have to play a very critical role That’s the other thing that all this documentation, third-party records, even bank statement analysis and your utility bill analysis and everything will help you to actually go through that audit in a much more seamless fashion Thanks, Rohit. When I think about it, I see the questions coming in I got one screen here with all the questions A lot of great questions. Thank you. We always work We have a team answering them and we leverage those questions for our FAQs But there’s a wide range of understanding of all the different interim final rules, the FAQs that have been issued by the SBA, the AICPA forgiveness calculator in this tool incorporates all of that information into this platform, so you can leverage this Basically, you need to have awareness of the forgiveness process, but by leveraging a tool like this, it’s going to give you the assurance that you’re following the correct steps and getting the right documentation We want to move to the practitioner discussion, but Rohit there are questions that have come in about security and privacy, even removing information Why don’t you talk briefly about that? This is a very important question, as we have stated in the past also We have sought to certify Deloitte as our auditor via Everything is in AWS It’s in a private instance Everything is hosted in US, East Coast and West Coast Both sides of the continent We’re ISO-27001 Certified and there is daily backups with all the disaster recovery and business continuity planning and play The other thing is that we are also CCPA compliant, which is very important In terms of taking the data out of the system So we have this whole bulk upload facility and also if people including firms or borrowers want to opt out of any of this messaging or anything, they can do it very easily The idea also is that the data is never going to get sold There are going to be no ads on the system It’s not an ad platform, it’s not a platform where any data will go out to any third party What this data will be used is for helping the firms and their clients to either apply for PPP forgiveness, get the PPP eligibility and down the line for other loan products as and when they need it So that’s the use of it and obviously, one of our aims is to give a lot of AIML or Artificial Intelligence Machine Learning based data analytics tools both for CPA’s as well as for the clients, as more data comes in because that’s the need of the hour and that’s where data can be used in a very smart way, and also make it easier for everybody who is involved of this Well, thank you. Both Rowan and I, we’re both here in New York City I’ve been to credits offices in New York City and I’m here at AICPA headquarters in New York City as well today We’ve known Business Credits for a number of years in CPA.com It’s all about working with the ecosystem and this has been a good partnership So what we’ve done here at our cost, our API costs, we’ve tried to make this pricing as low as possible This is foreign pricing The capabilities that are in this platform are significant The IP that’s in this platform is significant

But what we want to do is help the firms and help the 5 million businesses get their forgiveness applications done But there are just ongoing costs with every application that’s been submitted So there’s some base fees here I’m not going to get into these base fees I’ve talked to a lot of firms, and if you’re doing anything, you want to have a user agreement with something like this, that you’re going to leveraged to support your clients So I’ve received very good reception around what we’ve been able to do here At this level right now, just for the given tool at $500 or $1000 for the firms for the entire firm and then when and if PPP 2 comes out, it’s not really a question of if it’s a question of when, we will be able to make this a plan B for firms So I’m just going to move past the support slides so we can get into the practitioner discussion But there is a support team behind this and there’s different levels of support for premium in enterprise subscribers So with that, let’s have Kari and Travis join us, and [inaudible] you can stay on as well Let’s just get to Travis getting taught every week This is the highest rated portion So let’s talk about what’s going on with [inaudible] What are you talking to me? I know you’ve you’ve done a lot of PPP applications So put your clients in a few different categories, how are you managing the discussions? And then I’ve got a few follow-up question for you, but welcome, Travis Yes, sure thanks, Eric. I’m happy to be here today So we’re definitely into the full swing of forgiveness applications and I would say overall, we have clients that are put into a few different buckets What we’ve done at the firm is build on a team of professionals that are dedicated to assisting clients and speaking with clients about the forgiveness process which is very similar to what we did with the initial loan application phase, and with our task force that really stayed on top of the developments and the program changes and the updates and the regulations Our first step really internally is just to have a conversation with the client Let’s understand where they are today Let’s understand their pain points Let’s understand what their concerns are and then the second step really is to start obtaining the documentation Let’s see where they are from a forgiveness perspective If they’ve been able to achieve a high level of spend especially on payroll costs, there’s a decision to be made if we can and if we should file their forgiveness application sooner than later Some clients are comfortable waiting until 2021 They do have 10 months to submit the forgiveness application Other clients, it does help them sleep better at night if they get their forgiveness application in So we’ve tried as best as possible to develop a centralized process to really direct all the forgiveness applications and the questions to our team internally We feel that’ll enable us to work with these clients and assist them as intelligently and as efficiently as possible Well, let me try this, one thing we’ve been saying is that, most likely this business relief category is going to go on for a couple of years Even listening to Chairman Paulo today talk about where the economy is going, and there’s going to be future business relief So you’ve got a 10 month time frame to do the forgiveness application with Phase 1, you’ll have a similar time frame for Phase 2 So as you think about this, is this turning into a business category for us? Yeah, let’s say so I think it’s been a tremendous opportunity especially within our advisory practice It’s enabled our assurance team and our tax teams to focus on their core business and make sure they’re meeting the needs of our clients, and it’s enabled advisory to really step up and be a thought leader in the space and work really hand in hand with our clients from throughout the firm So it has been fairly productive for us and I think rewarding at the same time We’ve worked with hundreds of our clients and we’ve enabled those clients to obtain these funds and we’ve guided them throughout this process It really helped our clients maintain thousands of employees on their payrolls and that’s the that’s the key focus I think that’s really the soul overarching objective of what we’ve done within the firm Well, that’s well said I think it was May that you were on with us here at the town hall and you’ve

written blogs and I’m sure you’ve put together calculators there at the firm But now as you think about as someone who’s rather sophisticated in the whole of the PPP category, how are you thinking about managing this for the firm and putting capabilities in place? I know and I appreciate the reviews you’ve done related to the PPP tool that we just demoed So talk a little bit about your strategy and what your needs are and your thoughts on this tool Yeah, sure. So initially we have developed a document request lists, all of the significant amount of information that we are required to review to determine where clients stand from a forgiveness perspective, and we’ve developed our own internal checklist and incalculators But I think the main benefit and a key benefit of this tool is to create one central location to combine disparate data sources to enable us to efficiently assess where the client stands from a forgiveness perspective When we have a deeper understanding and when we know where they stand, then we can help advise on the strategy That strategy may be to apply for forgiveness sooner than later That strategy may be to increase their headcount or to determine if we can spend some of the remaining funds on a non payroll cost But I think as Kari mentioned earlier, we’ve had a number of professionals from throughout the community evaluating and testing these calculators throughout the process over the last few months here, and really you’re able to use a tool that’s geared towards the professional and that’s been built and reviewed by professionals Well, I’m going to have Kari ask a question here one minute I’ve seen questions coming in and some of the questions are, the banks are telling firms inclined to do this, to do that, and there’s a lot of different things that are being communicated What I can say is, we are talking to the bank and community, to the payroll community, to the firm community I would not let any one bank determine your strategy Some bank just said that, “Don’t do anything until we send you an email.” I don’t know if that’s the right strategy I think put in place what you’re going to do for your clients You’ve got many clients You’ve got those who have submitted to many banks What we’ve done here is, it wouldn’t make sense for the 44,000 firms to all develop these capabilities We want the firms to do what Travis just said that he’s doing, working on advisory, the thought leaders stuff What has happened now, we’ve had six months so we’re in a spot now where we can put a tool in place I can tell you this, we’re going to be ready to help the firms with PPP 2 I’ve seen questions come in on one of our favorite topics, the agent fees We want to make sure that that’s better done in the next phase Well, Kari, I know you had a more technical question that you wanted to talk to Travis about? Absolutely. We had a great discussion with the team and Travis the other day Travis hearing you and your clients experiences with the PPP is simply invaluable to our attendees So if you could today possibly touch on the treatment surrounding the FTE reduction specifically as it relates to the first safe harbor, which is that yes or no Check the box answer that I referred to you on the FTE calculator I won’t put you in the difficult spot of quickly defining what the first safe harbor is? It is again a yes or no of, was your business impacted by government guidelines and had to reduce their operations? Yeah. This is one of the more significant questions we see with increasing frequency and especially being located in the tri-state metro area, a significant number of our businesses were impacted by government mandated stay at home orders So I think that there’s a high degree of probability that clients are all eligible and they are able to take advantage of that safe harbor Across the board irrespective of the industry, we’ve seen clients have to cease operations, have to close their business down for weeks and for months, so there’s a high chance that many clients from a broad range of industries qualify for the safe harbor Great Thanks, Travis. You can stay on here

We’re going to move into this open forum Kari and I will grab some questions The slide that I just had, throw the slide backup for a second This is a great, we’ve got some great capabilities here with our webinar You heard from Rohit, it’s not just about PPP, there’s other programs out there We’re thinking about those Clearly, we want to get the PPP forgiveness process capability in place for the firms, and then you got the purple here, these additional relief programs, and we’re going to be on top of those if they come out over the next couple of weeks If it’s not on the next couple of weeks, after the elections With that, we’ll go to open forum here Lots of questions coming in Kari, I’ll let you just grab one and I’m looking at them as well Sure. There is one thing I would like to clarify that I saw come up a few times, and I apologize, I’m in quarantine with my younger brother, and he of course walked in when I was talking, so I may have got distracted and did not clarify this very well But the FTE calculator is the specific calculator that is dated today, 9/24 The other main calculator, the forgiveness calculator, the latest one is dated 9/16 They are separate resources, simply because of the complexity of the FTE calculations We wanted to keep them separate When you download the calculators off of AICPA.org/SBA, there is the forgiveness calculator and then there’s the FTE calculator, which is under the forgiveness resources expanding file I just wanted to clarify that when you’re looking at the dates, 9/24 is simply the FTE calculator Thanks, Kari. I’ll take a couple of questions here One is, what is the difference from the PPPForgivenessTool.com to Biz2Credit? Well, maybe we’ll put a short video out there But what we’ve done here, the PPP forgiveness tool is a partnership between the AICPA.com and Biz2Credit, where we’ve put this tool in place for firms and actually borrowers, I know 25 percent of the attendees on these town halls are CPAs and companies Yes, you can use just the borrower tool, and the firms obviously would want to use the CPA console so they can manage many clients That’s what this is, and we can put more information out about that partnership There’s a question here, Travis, that came in I’m going to ask you what you’re doing at Wiss, but can we build for the loan forgiveness? Yes. You need to sit down with your client and have engagement letters, we’ve talked about pricing strategies and value strategies in the past, and Dixie McCurley talked about how she just had a value of price to do the application forgiveness and the whole process You can build for this final process But Travis, how are you thinking through supporting your clients? Yeah, absolutely. Within the firm, we’re offering PPP forgiveness as a consultative service under the advisory team What we’ve done is we’ve come up with estimates of time involved depending on the size of the loan, the complexity of the company’s operations, if they’re working with a major payroll processor or if they’re hands-on, their payroll internally, and then we have a conversation with the client and understand what actions they took throughout the covered period Were there headcount reductions? Were there salary and wage adjustments? It’s all part of a comprehensive approach to deliver the best value for the client and make sure we’re getting them across the forgiveness finish line here Well, thanks, Travis. There’s a lot of questions coming in just about what’s the likelihood of the tax deductibility issue and some of the key legislative items we’ve been discussing Let me just quickly discuss the three items that we know are top of mind; the deductibility of a forgiven PPP loan We think that is most likely going to happen, but it’s not going to happen until after the election or even after the start of 2021 It’s going to take time There’s a lot of bipartisan support for that, but it doesn’t look like that necessarily will be in an upcoming business relief bill

That can change, but that’s how we see that The other element about when will automatic forgiveness, that threshold be set, or when will that be approved? Again, we do think that will happen, but our understanding is that that’s still is a ways off Rubio’s had some comments related to that It seems like that will not happen until after the election towards the end of this year, going into 21 There’s uncertainty on both of those items It looks like things will occur, but it will not occur in the near term Then we’ve got the PPP2 We’ve put out statements encouraging the passage of PPP2 We think the 135 billion plus of funds that are still remaining on the first version of PPP should be released Both [inaudible] and Powell, we’re talking about today of leveraging some of the main street funding leftover amounts and adding that to PPP2 They both stated that the best thing to do is to get some type of second phase of PPP They asked, what’s the fastest thing to do, the best thing to do to help businesses, and they said the PPP programs I think the firms here on this call should feel good about that because you’ve played the big role in making the first phase happen Kari, we have time for a quick question here, quick final question Let’s quickly talk about using the Excel file or the portal, or one of the other, or both We did have some additional questions come in asking to clarify if users had to use the Excel calculator and then upload it to the portal or if they could simply use the portal? Yeah, that’s a great question. You can just use the portal The thing is, some firms were using the forgiveness calculator and that was a feature they requested so we put that parsing capability in place, and I think the thing about the portal is that it’s comprehensive, it gives you the ability to upload documents, do the 3508, and have that file in a document retained Yes, you absolutely can just go to the portal and you don’t have to necessarily use the calculator Jagadeeswara, do you want to comment on that from what you are seeing the users do? That is correct. CPA users can use the portal directly because we have created the FTE calculator as well as the CPA calculator It’s on the portal digitally It helps to directly put the inputs rather than using the calculator Based on users’ comfort, they can directly put all the values on the portal directly Thank you. We have a couple of other items I want to cover I want to thank Travis, and the Biz2Credit, and the AICPA team here Let’s go back to the slides and we just got a couple of additional updates for you before we sign off Here’s the resource center that Kari’s mentioned a number of times today You should all be very familiar with it, AICPA.org\SBA I also want to highlight something that is receiving tremendous attention from the firms, and that’s the launch of the.cpa Internet domain In your materials is an announcement that we sent out today that over 50 percent of the major firm group and top 500 firms have already advanced their application process for.cpa Thousands of firms have applied I just want to encourage everybody to take advantage of this early application period It goes till October 31st Educate yourself on it at domains.cpa, you are in the position to reserve your existing URL if you do this by October 31st, and the adoption is significant I think this is a sign you want to make yourself aware of so you can make an informed decision for your firm and it’s a six page position paper that describes everything you probably need to know about these new domains, and that’s at domains.cpa We’ve got some great upcoming town halls for you Next week, Barry Melancon, who you all know, the President, CEO of AICPA, will be joining us, along with Martin Mucci That’s a typo there, it’s M-U-C-C-I, the CEO of Paychex

He has some of the best insights on what’s happening with the business economy Barry will be talking about profession, Marty a little bit about what’s happening with small businesses in America Then in two weeks, we’re going to have Congresswoman Fletcher Thank you very much for being with us today Thank you for your questions We greatly value this time Don’t hesitate to contact us if there’s any any additional questions you have There was a question of how you can reach out to us The Twitter handles are great. That’s one You can send us messages via Twitter or directly via email Thanks again for your time and we look forward to seeing you next week