AGC Leads Effort to Address PPP Tax Issues
On Thursday, 564 trade associations led by the Association of General Contractors (AGC) asked Congress to pass legislation reversing a ruling made by the IRS, disallowing the deduction of expenses related to the forgiveness of Paycheck Protection Program Loans (PPP). The Notice by the IRS will result in the PPP Loan proceeds being taxed up to 37 percent. After this Notice the AGC led a coalition letter addressing Chairmen Neal and Grassley to overturn the IRS’s decision to disallow expenses related to PPP Loan forgiveness.
Most recently the IRS has issued another Revenue Ruling (2020-27) which says that that expenses funded through a PPP loan are not deductible for 2020 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”
You can read about the efforts of the AGC here.
