from the IRS says that, if a business “reasonably believes” that its Paycheck Protection Program (PPP) loan will be forgiven, the costs related to that loan are not deductible. This will pump up the tax bills of companies struggling to survive the ravages of the pandemic. The AICPA, along with many other associations and organizations, is asking Congress to address the issue with legislation, namely bipartisan legislation S.3612 and H.R.6821—the Small Business Expense Protection Acts of 2020, or H.R. 6754—the Protecting the Paycheck Protection Program Act—that will ensure the receipt and forgiveness of PPP assistance does not result in an unexpected and burdensome tax cost. “PPP recipients—particularly small businesses—cannot afford to be surprised with a tax bill next year on their PPP loan expenses and more than ever before need to be able to project how much cash they will have to cover their basic expenses,” says AICPA vice president of taxation Edward Karl
in a release
. “Members of Congress must act now and pass this legislation to ensure that struggling businesses and their owners can recover.”
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