Legal Alerts/Details

IRS Releases Much-Awaited Guidance on PPP-Loan-Related Expenses, But More is Still Needed

December 01, 2020
  1. The manner in which these developments came about was fairly controversial. Initially some believed that Congress intended PPP borrowers who paid eligible expenses during the covered period to benefit from both (i) the exemption of income and (ii) a corresponding deduction. The IRS guidance disallowed the latter. To fuel the controversy, in May, 2020, Senate Bill 3612 was introduced and provided that receipt of PPP loan forgiveness should not cause the denial of the deduction of the business expenses paid from the PPP loan funds. However, to this day, the bill has not passed, meaning that IRS Notice 2020-32 continues to remain in effect.

©2024 Snell & Wilmer L.L.P. All rights reserved. The purpose of this publication is to provide readers with information on current topics of general interest and nothing herein shall be construed to create, offer, or memorialize the existence of an attorney-client relationship. The content should not be considered legal advice or opinion, because it may not apply to the specific facts of a particular matter. As guidance in areas is constantly changing and evolving, you should consider checking for updated guidance, or consult with legal counsel, before making any decisions.