Got a PPP loan? IRS says you can’t deduct expenses from them — at least for now
Thu Dec 10, 2020
Partner Meghan Douris and Melia Preedy authored “Got a PPP loan? IRS says you can’t deduct expenses from them – at least for now,” that appeared in the Seattle Daily Journal of Commerce’s Construction Spotlight on Thursday, December 10, 2020.
Hidden amongst the never-ending news cycle of 2020 was the fact that on April 30 the IRS declared that taxpayers cannot claim a deduction for any otherwise deductible expense (including payroll, mortgage interest, covered utility payments and rent), if the taxpayer received a Paycheck Protection Program loan and sought forgiveness of that loan.
On Nov. 18, the IRS doubled down on that position, issuing both a Revenue Ruling (which is an official interpretation of the Internal Revenue Code) and a Revenue Procedure (which is an official statement of a procedure that affects the rights and duties of a taxpayer). Another way of looking at it — the IRS stated its position and then told us how to implement that position.
The IRS’s position is significant because the CARES Act, Section 1106, did not address whether deductions were or were not allowable. To read the full article please click here. You can also view a PDF version of this article here.
To read Oles Morrison’s full coverage of COVID 19, please click here.