The Paycheck Protection Program has provided over 4.8 million loans to businesses impacted by the pandemic, but the Internal Revenue Service keeps hindering the Congressional intent to give business owners the greatest financial benefit from those loans. Juan Vasquez Jr., Jaime Vasquez, and Victor Viser of Chamberlain Hrdlicka highlight what they say the IRS got wrong in the latest guidance on the tax treatment of the loans in Bloomberg Tax on July 23, 2020.
The Paycheck Protection Program (PPP), created as part of the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act), has provided over 4.8 million loans to businesses impacted by the Covid-19 pandemic. If businesses use their PPP loans for business expenses such as rent, utilities, certain payroll costs, and mortgage interest then those expenses may be forgiven, subject to wage, and full-time equivalent tests. This forgiveness is a critical feature of the program, incentivizing businesses to allocate funds toward supporting their employees and by extension their communities.
To read the article, click on this link - https://news.bloombergtax.com/daily-tax-report/insight-irs-undermines-congressional-intent-for-relief-loans-62