March 30, 2021

Businesses Now Have Until May 31 to Apply for a PPP Loan

President Biden recently signed a bill to extend the Paycheck Protection Program (PPP) application deadline to May 31, 2021. This extension from the March 31 deadline is welcome news to business owners still needing to apply for a PPP loan. The bill also gives the SBA an additional 30 days beyond May 31 to process PPP loans.

Visit the SBA’s website for more information on how to apply for a PPP loan.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed on our COVID-19 Resource Center. Tune in to our video series PPP with Paul and Dan to learn more about the Paycheck Protection Program.

To discuss how we can best assist you and the associated fees, contact an Anders advisor below.

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March 30, 2021

The 5 D’s of Transition Planning: Why Business Owners Need to Plan for the Worst-Case Scenario

Whether you own a growing startup or a multi-generational family legacy, business owners understand that planning for the future is key in reaching business goals. While there are certain factors we actively plan for, including revenue goals, strategic growth plans and the future state of the company, there are other unknowns that require just as much planning. “De-risking” the company is a pivotal first step in preparing for the unexpected. While the owner may think they’re 10 or 20 years out from exiting, circumstances beyond their control can happen at any time. We refer to these circumstances as the 5 D’s: Death, Disability, Divorce, Disagreement and Distress. 

According to the Exit Planning Institute, nearly 50% of all business exits are involuntary and forced by dramatic external factors, and 79% have no written plan. Planning for the 5 D’s will not only give you peace of mind but could have a significant long-term ROI.

The Cost of Not Having a Transition Plan

It is important to run through the tough questions about what you want to happen to your business if you have to exit your business prematurely. Statistics from the Exit Planning Institute have shown that in the four years following an owner’s death, sales decline 60% on average and employment falls around 17%, resulting in a decline in the business’s overall valuation. Additionally, two years after an owner’s death, companies are 20% more likely to fail or file for bankruptcy. Having a plan in place can lower the risk of catastrophe happening to your business in your sudden absence.

Creating Contingency Plans

What do you want your family, clients and management team to know? What do you want to happen if you die or become disabled? What should happen if you or your spouse wants a divorce? What happens if there is a disagreement between business partners? An unplanned exit can not only impact the day-to-day operations of your business, but also the tax and legal aspects of it, along with the value of your company. Creating contingency plans for each of the 5 D’s can help owners properly prepare for any unplanned scenario.

While each of these unplanned events will be treated differently, an important step is creating and communicating the action plan for each contingency. This is done through a contingency letter, which serves as a playbook that is a shorthand to your operating agreement and your estate planning documents. Your contingency letter should outline what you, as the owner, would like to happen if you can no longer operate the business.

Have you planned for these contingencies? At Anders, we partner with business owners to create a personalized plan to de-risk the business. Having a written plan on how your business will handle situations out of your control can protect your business’s value. Anders Business Transition Planning can work with you on a personalized transition plan based on your Value Builder assessment. Contact an Anders advisor below to learn more.

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March 25, 2021

Should You Take Advantage of the Economic Injury Disaster Loan Increases?

The SBA recently announced an expansion to the Economic Injury Disaster Loan (EIDL) program for small businesses and not-for-profit organizations. Starting the week of April 6, organizations that received an EIDL that was capped at $150,000 will soon be notified that they may be eligible for an increase up to a total loan amount of $500,000.

What is changing with the EIDL program?

EIDL funding was designed to cover those organizations suffering COVID-19 related economic damage for six months. With new changes by the SBA, the program is now being extended to 24 months. This will potentially provide significant increases for many loan recipients as past financial information will still be used in determining qualification. It will also further defer payments out 18-24 months.

Should I increase my EIDL?

After the CARES Act was passed, some businesses applied to receive a substantial amount of EIDL funding early on because there was a great amount of uncertainty around future funding opportunities. This was a good opportunity for some businesses to keep their doors open, but the EIDL funding comes with some very restrictive loan covenants and terms on how the funding can be used. They are designed for disaster recovery, so if a company is back on solid footing, they may want to re-evaluate the opportunity before increasing the loan amount to make sure it fits long term.

How can I increase my EIDL?

According to the SBA, businesses that receive a loan subject to the current limits do not need to submit a request for an increase. The SBA will reach out directly via email and provide more details about how businesses can request an increase closer to the April 6 implementation date.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed. Visit our COVID-19 Resource Center for more resources.

To discuss how we can best assist you and the associated fees, contact an Anders advisor below.

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March 25, 2021

Shuttered Venue Opportunity Grants Offer COVID-19 Relief for Entertainment Venues

Updated 4/26/2021

As part of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act signed into law in December 2020, the Shuttered Venue Opportunity Grant (SVOG) was created to offer COVID-19 relief to entertainment venues. The American Rescue Plan allocated an additional $1.25 billion to the program, bringing the total funding available to $16 billion.

Who is eligible for a SVOG?

According to the SBA, the following organizations may apply for a SVOG as long as they were in operation as of February 29, 2020:

  • Live venue operators or promoters
  • Theatrical producers
  • Live performing arts organization operators
  • Museum operators
  • Motion picture theatre operators
  • Talent representatives

How much can I apply for?

Eligible organizations can apply for a grant equal to 45% of gross revenue, up to $10 million. $2 billion of SVOG funding is allocated for eligible organizations with up to 50 full-time employees.

What can SVOG funds be used for?

According to the SBA, SVOG funds may be used for:

  • Payroll costs
  • Rent payments
  • Utility payments
  • Scheduled mortgage payments (not including prepayment of principal)
  • Scheduled debt payments (not including prepayment of principal on any indebtedness incurred in the ordinary course of business prior to February 15, 2020)
  • Worker protection expenditures
  • Payments to independent contractors (not to exceed $100,000 in annual compensation per contractor)
  • Other ordinary and necessary business expenses, including maintenance costs
  • Administrative costs (including fees and licensing)
  • State and local taxes and fees
  • Operating leases in effect as of February 15, 2020
  • Insurance payments
  • Advertising, production transportation, and capital expenditures related to producing a theatrical or live performing arts production. (May not be primary use of funds)

Organizations with SVOG funding should maintain good recordkeeping including receipts for three years following the receipt of the grant and four years of employment records.

Can I apply for a SVOG if I have a PPP loan?

Organizations that received a Paycheck Protection Program (PPP) loan on or after December 27, 2020 can also apply for a SVOG, but the SVOG amount will be reduced by the amount of the PPP loan. Those who received a PPP loan before December 27, 2020 can apply for a SVOG without deducting the PPP loan amount.

How can I apply for a SVOG?

Applications can now be submitted through the SBA’s Shuttered Venue Operators Grant Application portal. Please note that the portal is moving slowly due to high volume.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed. Visit our COVID-19 Resource Center for more resources. To discuss your situation and recovery options, contact an Anders advisor below.

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March 23, 2021

Boost Your 2021 Cyber Protection with These 6 Microsoft Must-Have Tools

In our modern, technological world, IT departments are tasked with defending every device in their organization from attack by everyone from rogue nation states to corporate competitors, to college students. Attack strategies have grown – Verizon estimates that 52% include hacking, 28% involve malware, and 33% use phishing or some form of social engineering. Additionally, the payouts for hackers and potential losses for businesses have escalated. Security Intelligence reports 2019’s average cost of a data breach to be $3.92 MILLION. Can your business afford to have a data breach?

6 Tools to Add to Your Cybersecurity Arsenal

While security is the utmost importance, overly complex security measures are useless if employees are unable to utilize the data they need. Microsoft platforms, like Azure and Enterprise Mobility + Security (EMS), ensure that your company’s data is both protected and accessible to those authorized to use it.

Azure Active Directory

We’ve talked about how to make Azure Active Directory (AAD) work for your company. AAD can provide identity management for all of your users, whether they’re on-premises, remote, or hybrid, and whether they’re accessing applications locally or in the cloud. From a security perspective, this technology makes managing a remote workforce seamless by controlling functions and limiting what is accessible under the umbrella of your domain.

Multi-Factor Authentication

Multi-Factor Authentication (MFA) is the single most important action you can take to prevent accounts from being compromised. According to Microsoft, MFA can block over 99% of account compromise attacks. The concept is simple: login requires not just a guessable password, but also a second factor that cannot be guessed or brute forced. In the most common implementation, MFA is simply a notification to a user’s phone when they attempt to login from outside of the building. The end result is that an outside attacker needs not just a user’s password, but also a user’s phone to gain access to the user’s account.

Technologies within AAD enable us to fine tune MFA policies to provide the maximum amount of protection with the least amount of headache for your users. For example, maybe you only want to require MFA if a user is signing in from an unrecognized device. Or, maybe you want to require MFA if a user is signing on from outside of the building, or outside of the country, or has entered an incorrect password 3 times. With MFA in AAD, all of those policies and more are no problem. These tools are the best effort at eliminating unauthorized access to that leads to compromised mailboxes, and malware released on networks to cause chaos.

Azure Information Protection

Azure Information Protection (AIP) allows you to manually or automatically classify data and prevent it from leaving your environment. For example, if your organization wants to prevent documents containing Social Security Numbers from leaving the company, an AIP policy can automatically identify documents containing them and then block them from being emailed, copy/pasted, printed, or otherwise shared. Or maybe you want users to be able to classify documents on their own – AIP can do that too with Sensitivity Labels. An administrator can setup policies to apply to any document with a label applied, and then users can decide which documents to label. You can even combine the possibilities, with automatic and manual data classification policies. Without a policy like those mentioned above, the potential exists for an organization to allow sensitive information to go outbound into the wrong hands, and the organization would be held responsible.

Attack Simulator for Office 365

Phishing occurs when an attacker uses a legitimate-looking communication as bait to entice an unsuspecting user into illegitimate actions. Phishing attacks can be very sophisticated and fool even the most security-minded users. The best defense against phishing is to train your users to recognize phishing emails, and to periodically test and shore up weak areas.

Microsoft 365 includes a phishing attack simulator that allows administrators to simulate a phishing attack to select users in order to identify who might be at risk. Administrators can generate official-looking but false emails to entice users to click a link. The results of these tests allow administrators to target users who may need increased security training. Executing the simulator may reduce your potential for attack by 50% by training employees not to click on emails that have links that lead to malware, hackers, and ransomware that can dismantle an organization.

Microsoft Defender for Identity (MDI)

Many attacks begin with a compromised account. Microsoft Defender for Identity (MDI), formerly Azure ATP, monitors user behavior throughout your network, creating behavioral baselines for each user. Then using Artificial Intelligence (AI), MDI alerts on suspicious activities, revealing potential compromised users and insider threats. It helps you know in advance where potential attacks may come from, which allows you to remediate them. Identifying abnormal characteristics by comparison to normal activities, like that of a hacker, is a significant ability to provide the opportunity to stop incidents that can originate from malware, unwanted wire transfers, and ransomware.

Cloud App Security

Microsoft Cloud App Security is a Cloud App Security Broker that enforces your enterprise’s security policies in real time. It monitors user activity for abnormal behavior and can automatically restrict user accounts who are behaving as if they’re compromised. It works across many different collaboration platforms, helping you to manage the proliferation of shadow IT by blocking your data from moving into unauthorized applications. For example, let’s say your company uses Microsoft OneDrive and you want to find out if employees are uploading corporate data to DropBox instead. Cloud App Security will not only give you the visibility into where your data goes but can also allow you to prevent it from going there. Without a policy like those mentioned above, the potential exists for an organization to allow sensitive information to go outbound into the wrong hands, and the organization would be held responsible.

Putting it All Together

A University of Maryland study revealed that hackers attack every 39 seconds. Your organization is vulnerable, and if you’re not taking proper precautions, you will be compromised eventually. Fortunately, Microsoft’s suite of tools provides businesses with a broad and powerful set of tools to protect systems from compromise, and to limit damage.

As a Microsoft Gold Partner, Anders Technology advisors have the training, experience, and expertise to secure your organization from breaches, both internal and external. We can help you understand today’s complex security environment and develop a security posture that will keep your data safe without inconveniencing your legitimate users. Contact an Anders advisor below to discuss your situation.

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March 19, 2021

How Employers Can Take Advantage of the Expanded Employee Retention Tax Credit

On March 11, President Biden signed into law the American Rescue Plan Act of 2021 (ARPA). This relief bill comes in response to the continued COVID-19 pandemic and makes some changes to the Employee Retention Tax Credit (ERTC) that was originally part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and later expanded and extended under the Consolidated Appropriations Act (CAA) of 2020. Below we dig into the changes and expansions that were part of the CAA and the recently enacted ARPA.

QUICK REFRESHER ON THE ORIGINAL ERTC

Let’s first revisit the provisions of the ERTC in the original CARES Act. Enacted in the spring of 2020, the Act allowed businesses to take a credit against payroll taxes in order to help offset some of the business losses due to COVID-19. The law allowed eligible employers to take a credit of 50% of qualified wages up to $10,000 paid to employees between March 12, 2020 and January 1, 2021. Consequently, the maximum credit for each employee was $5,000 ($10,000 in wages X the 50% tax credit rate).

However, not every business was eligible for this credit. Businesses must have been significantly impacted by COVID-19 either by a shutdown order or by experiencing a significant reduction in revenue. There were also restrictions on which wages were “qualified” if an employer had more than 100 full-time employees. Businesses were also not allowed to take the credit if they used Paycheck Protection Program (PPP) loans to cover employee payroll costs.

UPDATES AND EXPANSIONS TO THE ERTC

The passage of both the CAA and the newly signed ARPA relief bill is good news to many businesses who continue to feel the economic impacts of the pandemic as the laws enhance and expand many provisions of the original ERTC. Under the CAA of 2020, the ERTC was extended until June 30, 2021 and increased the tax credit to 70% of qualified wages for each of the first two quarters of 2021.

With the newly enacted ARPA legislation, the ERTC has been extended again – this time through December 31, 2021. This means an employer eligible for the ERTC in all four quarters of 2021 could receive up to $28,000 in credits per employee ($10,000 quarterly wage cap x 70% x 4 quarters).

ERTC Eligibility

More businesses will be eligible for the ERTC in 2021. The original ERTC was only available for businesses who were forced to shut down or whose gross receipts in 2020 were 50% less than the same quarter in 2019. The CAA modified this reduction in revenue by 30%. Under the CAA guidelines, the test was satisfied for either of the first two quarters of 2021 if gross receipts were less than 80% of the gross receipts for same quarter in 2019. The ARPA extends the 80% gross receipts test for the third and fourth quarters of 2021 as well. 

ERTC Wage Threshold

A change in the threshold for determining which wages “qualify” for the tax credit will also benefit employers in 2021. Under the original CARES act, for businesses with less than 100 full-time employees, all wages qualified for the tax credit, regardless if the employee’s role changed or not due to the pandemic. Whereas businesses with over 100 employees could not claim the credit for employees that were still performing services for the business.

The CAA, effective January 1, 2021, raised the threshold number to 500 employees.  In addition, the ARPA, effective July 1, 2021, also includes a new provision for “severely financially distressed employers.” These employers are defined as those whose gross receipts are less than 10% of the gross receipts for the same quarter in 2019. If an employer meets this definition, they may treat all wages paid to employees as qualified wages regardless of the number of full-time employees. 

Employers with PPP Loans

Initially, the CARES Act prohibited employers who had received a PPP loan from also utilizing the ERTC. The CAA allowed an employer to claim the credit for any wages paid beyond the proceeds of the PPP loan that have been forgiven. This change is retroactive to the effective date under the original law: March 12, 2020. A company that received a PPP loan in 2020 but paid qualified wages beyond the amount of the loan could benefit by filing an amended Form 941 and claiming the credit.

NEW ENHANCEMENTS TO THE ERTC

While many provisions of the CAA and the ARPA enhanced the CARES Act, they also include some brand-new provisions as well. Under the CAA, businesses can take an advanced payment on their credit even if those wages have not yet been paid. Additionally, some government entities not previously allowed to take the credit became eligible with the passage of the CAA, such as public universities, hospitals, federal credit unions, etc.

The ARPA also allows a startup business to take the ERTC even if the business does not meet the other ERTC eligibility tests. To qualify the business must have been established after February 15, 2020 and have annual gross receipts of no more than $1 million. The recovery startup credit is capped at $50,000 per quarter, per employer.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed. Visit our COVID-19 Resource Center for more resources.

Find out if your business is eligible for the Employee Retention Tax Credit in 2020 or 2021.

To discuss how we can best assist you and the associated fees, contact an Anders advisor below.

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March 18, 2021

IRS Extends Federal Individual Income Tax Filing Deadline to May 17

The IRS has officially extended the federal individual income tax filing and payment deadline from April 15 to May 17, 2021 as part of relief efforts around the COVID-19 pandemic. All taxpayers will have an additional month to file their federal income tax returns and pay any taxes due for the 2020 tax year. Taxpayers who are ready to file are encouraged to still file by April 15, especially those anticipating refunds.

This IRS guidance only applies to federal individual income tax filings, not state tax filings or payments. In addition, gift tax returns, 2021 first quarter estimated tax payments, trust returns and IRA contributions currently appear to continue to be due on April 15. State filing and payment deadlines vary by state and may change based on federal guidance. We expect additional guidance to follow that may address these items.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed. Visit our COVID-19 Resource Center for more resources. To discuss your tax situation, please contact an Anders advisor below.

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March 18, 2021

Why Does Your Startup Need a Valuation?

As a startup owner, you are most likely aware of the crucial financial indicators and balances nestled within your company’s financial statements. Having an idea of your company’s cash balances, total assets and annual revenues can provide insight to estimate what your company might be worth. With all of this information at your fingertips, why would you need a valuation from a third-party?

Benefits of Having Your Startup Company Valued

Having a third-party perform a valuation of your company can help you determine a true, impartial value for your company. The valuator is looking at your company from an unbiased view and is able to determine where your company could make some improvements or enhance things you are doing really well. The valuator can also help analyze the validity of the company’s projections to make them more in line with what is trending within the industry and the local economy. Having this third-party view can be advantageous when pitching your company to venture capitalists or other potential investors who will also be analyzing your company’s financial data.

When a Business Valuation May Be Needed

Below are a few instances that might require a third-party valuation.

Obtaining Financing: Startup financing can come from a multitude of resources. No matter where you acquire your funding, though, the lender or investor will most likely request a valuation report from a third-party valuator. Having a valuation report completed before requesting your funding can help streamline processes and facilitate financing discussions.

Gift and Estate Tax Planning: Getting a proper valuation can help reduce tax liabilities associated with gift and estate tax planning.

Mergers and Acquisitions: Knowing the value of your company can help weed out offers that may be too low and help you determine a fair price for your company. Having a third-party value can also help when negotiating potential offers.

Business Transition Planning: Knowing the value of your company before considering possible exit strategies can help narrow down potential transition options and decide what works best for you. It can also determine areas for improvement to help increase your company’s value before you head into negotiations.

Every startup company is unique and will require a third-party valuation for a variety of reasons. But no matter the company, having a third-party valuation on hand can be a great asset to help improve your company’s growth and value. The Anders Startup Group and Forensic and Litigation team can help provide the guidance you need through the valuation process. Contact an Anders advisor below to learn about the valuation process for your startup.

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March 16, 2021

Anders Earns Spot in Top 100 Accounting Firms in the U.S.

Anders has broken into Accounting Today’s 2021 Top 100 Firms list for the first time. Consistently named to the Beyond the Top 100: Firms to Watch list for eight consecutive years, Anders jumped three spots in 2021 from #103 to #100. With Top 100 firm revenues starting at $43.5 million, Anders is among three firms new to the list in 2021. Anders is one of four firms in Missouri and one of seven Leading Edge Alliance firms in the Top 100.

“Making the Top 100 Firms list is a significant milestone for our firm, and to do it in a year like 2020 is a true testament to our incredible staff and resilient clients,” explains Robert J. Minkler, Jr., Managing Partner at Anders. “We’re honored to be among the Top 100 Firms in the country and look forward to continued growth for the firm and our clients.”

As the profession and Top 100 firms continue to look towards advisory for 2021, Anders plans to strategically expand the firm’s advisory practice and focus on helping clients recover from the effects of the pandemic with advisory services including COVID-19 Business Recovery, Technology, Outsourced CFO, among others.

Download Accounting Today’s special report on the 2021 Top 100 Firms and Regional Leaders.

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March 16, 2021

Prevent Identity Theft at Tax Time with These 4 Tips

It’s crunch time for filing individual tax returns, which means tax-related identity theft is on the rise. Each year, more and more scammers plan to steal personal information of taxpayers to file a fraudulent return or claim a refund. Protecting yourself and your loved ones from tax-related identity theft is vital, and below are four tips and steps you can take.

1. Know How the IRS Will Contact You

Some scammers will impersonate the IRS via email, text or social media to get ahold of personal information. If you’re suspicious of correspondence you receive from someone acting as the IRS, know that the IRS will NEVER:

  • Initiate contact with taxpayers by email, text or social media to request personal or financial information
  • Call taxpayers with threats of lawsuits or arrests
  • Call, email or text to request taxpayers’ Identity Protection PINs

The IRS has an Identity Theft Central full of information, with videos and resources around
protecting your personal information and how the IRS combats identity theft.

2. Get an Identity Protection PIN Through the IRS

This year, the IRS is helping keep tax return information secure by establishing an Identity Protection PIN program. The Identity Protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number. The IP PIN is known only to the taxpayer and the IRS and helps verify identity when filing electronically or via paper tax return. Starting in 2021, taxpayers may voluntarily opt into the IP PIN program as a proactive way to protect from tax-related identity theft. 

3. Keep an Eye on Your Social Media

Social media is a growing hot spot for identity theft. In an age where almost everyone is on some sort of social media platform, it’s important to remember online security best practices so scammers can’t take advantage of you. Be aware of the personal information you share on social media, even if you believe you’re sharing privately to friends. Make sure you’re using strong, complex passwords for all social media sites. Passwords should be unique and at least 12 characters long with capitalization, numbers and symbols.

4. Work with a Secure Firm

Working with a reputable CPA firm that focuses on data security can be a much safer option than filing yourself. Seek out a firm that has multiple layers of security to protect your data, including:

  • Multi-factor authentication on all devices so client information doesn’t end up in the wrong hands
  • Website begins with “HTTPS” showing that the site is encrypted for security purposes
  • Modern encryption technology to protect tax returns
  • Works with trusted vendors
  • Offers secure electronic filing on trusted software and trusted networks

Warning Signs of Tax-Related Identity Theft

You may not know you’re a victim of identity theft until you’re notified by the IRS of a possible issue with your return, but it’s important to be proactive. Here are some warning signs that someone is filing a fraudulent return on your behalf:

  • You get a letter from the IRS about a suspicious tax return that you did not file.
  • You can’t e-file your tax return because of a duplicate Social Security number.
  • You get a tax transcript in the mail that you did not request.
  • You get an IRS notice that an online account has been created in your name.
  • You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
  • You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
  • IRS records indicate you received wages or other income from an employer you didn’t work for.

The tips above can help protect against tax-related identity theft, but it’s important to keep data protection top-of-mind throughout the year. Anders stays at the forefront of cybersecurity and data protection best practices year-round, and the security of our client information is a main focus every day. Contact an Anders advisor below or learn more about Anders Tax Planning and Compliance services.

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