After the IRS released the Notice 2020-32 (link below) indicating that the PPP funds used to cover business expenses were non deductible, the legislators like Sen. Charles Grassley (R-IA), the chair of the Senate Finance Committee, and Rep. Richard Neal (D-Mass.), the chair of the House Ways and Means Committee, have expressed that the IRS interpretation runs contrary to the goal of the PPP. Additionally, in early May, the AICPA sent a letter to Sens. Tom Carper, D-Del., John Cornyn, R-Texas, Charles Grassley, R-Iowa, Marco Rubio, R-Fla., and Ron Wyden, D-Ore., commending their efforts and supporting S. 3612.
IRS Notice 2020-32 https://www.irs.gov/pub/irs-drop/n-20-32.pdf
Journal of Accountancy – https://www.journalofaccountancy.com/news/2020/may/bill-would-make-ppp-funded-expenses-deductible.html
Based on the current events, we expect a remediation in the near future as legal firms are getting ready to fight the PPP expense deductibility for their clients.
