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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsLiberal group warns against allowing tax write-offs for expenses paid with PPP loans
A liberal tax group is urging Congress to not allow businesses to deduct expenses paid for with forgiven Paycheck Protection Program (PPP) loans, arguing that such a move would amount to "double dipping."
"Since forgiven PPP loans are excluded from income for tax purposes, permitting such deductions amounts to businesses double dipping: they receive tax-free income from taxpayers when the loan is forgiven, then deduct expenses that public income paid for to cut their own taxes," Americans for Tax Fairness (ATF) Executive Director Frank Clemente wrote in a letter to Congress.
ATF is a coalition that includes labor unions, think tanks and other left-leaning organizations.
The PPP is a coronavirus-relief program, created by the CARES Act that Congress passed in March, under which small businesses could receive loans that are fully forgivable if used for payroll and certain other expenses. The IRS has issued guidance stating that expenses associated with PPP loan forgiveness are not tax deductible because the loan forgiveness is not considered taxable income.
https://www.msn.com/en-us/news/politics/liberal-group-warns-against-allowing-tax-write-offs-for-expenses-paid-with-ppp-loans/ar-BB1bQVaX?ocid=DELLDHP&li=BBnbfcL
ProfessorGAC
(65,230 posts)I do have concerns as to how easy it will be to audit, though.
Hoyt
(54,770 posts)From article in OP:
"The IRS has issued guidance stating that expenses associated with PPP loan forgiveness are not tax deductible because the loan forgiveness is not considered taxable income."
Months ago, the IRS's position was published:
"In guidance issued late on Wednesday, the IRS reiterated its position that taxpayers cannot claim a deduction for any otherwise deductible expense if the payment of the expense results in forgiveness of a Paycheck Protection Program (PPP) loan because the income associated with the forgiveness is excluded from gross income under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. . . . . .
https://www.journalofaccountancy.com/news/2020/nov/ppp-loan-forgiveness-irs-safe-harbor.html