IRS Clamps Down Further on PPP Deductibility
In the latest setback in the administration of the Paycheck Protection Program (PPP), the Internal Revenue Service (IRS) announced on November 18, via Revenue Ruling 2020-27, that expenses funded through a Paycheck Protection Program (PPP) loan are not deductible for this tax year if “the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period, even if the taxpayer has not submitted an application for forgiveness of the covered loan by the end of such taxable year” (emphasis added). AGC is opposed to this IRS position and will continue to fight for the deductibility of expenses paid for with PPP loan funds.
As for the outlook on a legislative solution to this situation, AGC is working with many coalition partners to try and get the PPP deductibility issue remedied before the end of the year.