In a previous post, I noted that the IRS issued Notice 2020-32, asserting that company expenses paid with Payroll Protection Program ("PPP") Loan proceeds would not be deductible if the loan was forgiven. While the IRS position made accounting and tax sense, I questioned whether or not Congress intended to give the companies this additional benefit in the future when the future is so uncertain.
Well, it looks like the benefit today and in the future is exactly what some senior members of Congress intended and they will be pushing for legislation to overturn the IRS ruling. Legislation is the best way to remove any confusion and continue to help businesses survive, today and in the future.
Top lawmakers in both parties asked the Internal Revenue Service Tuesday to reverse a ruling that would deny those deductions. And senior senators backed legislation that would overturn the IRS ruling if the agency doesn’t change its position, though how quickly such a bill could move through Congress is far from certain.