As expressed in our previous post titled ” Deduction of PPP expenses? IRS Notice 2020-32 says no, but it might change ” from May 2020, we mentioned that the legislators were planning to introduce legislation to allow the deductibility of expenses covered with PPP funds. After the IRS issued Notice 2020-32, several legislators commented that the IRS interpretation runs contrary to the goal of the PPP.
Extract from the Forbes article: “Senator Cornyn (R-TX) and a bipartisan group of Senators (including Chairman Grassley (R-IA) and Ranking Member Wyden (D-OR) of the Finance Committee) introduced legislation, S. 3162, the “Small Business Expense Protection Act,” a few weeks ago that would clarify that businesses that receive a loan from the Paycheck Protection Program (PPP) – and the loan is forgiven — can deduct business expenses paid by the PPP loan from their taxes.”
These articles keep us optimistic that a potential bill or change in the legislation will be possible before the end of the year.
Previous post from May 2020 – https://ggcpaservices.com/blog/deduction-of-ppp-expenses-irs-notice-2020-32-says-no-but-it-might-change/
Article WSJ – https://www.wsj.com/articles/congress-seeks-to-fix-120-billion-tax-snafu-in-ppp-loans-11596037094
Article Forbes – https://www.forbes.com/sites/deanzerbe/2020/07/30/ppp-loans-and-deductibility-of-business-expenses–senator-cornyn-makes-the-good-fight/
