The IRS ruled that a Paycheck Protection Program (PPP) borrower who spends PPP funds on normal business expenses cannot deduct those expenditures for federal tax purposes. But its position, which left many in congress wondering if the IRS missed the 335-page memo, may not be the last word. Today, a bipartisan group of congressional leaders formally alerted the Treasury Department that they “believe the position taken in the [IRS] Notice ignores the overarching intent of the PPP, as well as the specific intent of Congress to allow deductions in the case of PPP loan recipients.” In other words, they believe the IRS got it dead wrong.
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Congress Goes After the IRS on the Taxability of the PPP Deductions
May 7, 2020