"Velázquez Calls on Trump Administration to Reverse Stance on Deductibility for PPP Borrowers"
Summary
A press release dated November 23, 2020 reporting that Rep. Nydia M. Velázquez (D-NY), Chairwoman of the House Small Business Committee, wrote to the SBA, the Treasury Department and the Internal Revenue Service asking them to reverse their stance on the deductibility of expenses paid with Paycheck Protection Program (PPP) loan funds. The release states that the IRS has issued multiple rulings treating loan proceeds as taxable, which it says runs against congressional intent under the CARES Act. It reports that many small business owners objected that the policy increases their tax liability. The letter asks Treasury and the IRS to bring their position in line with Congress's intent and extend the promised CARES Act benefits to PPP participants.
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Full text
Velázquez Calls on Trump Administration to Reverse Stance on Deductibility for PPP Borrowers November 23, 2020 Washington, D.C.— On Friday, Rep. Nydia M. Velázquez (D-NY), Chairwoman of the House Small Business Committee, wrote to the Small Business Administration (SBA), Treasury Department, and the Internal Revenue Service (IRS) asking the agencies to reverse their stance on the deductibility of expenses payed for with funds obtained via Paycheck Protection Program (PPP) loans. Despite clear congressional intent under the CARES Act, the IRS has issued multiple rulings in recent months treating loan proceeds as taxable. Many small business owners have objected to the rulings, claiming that the policy increases their tax liability and places a more significant financial burden on them during a precarious time. In the letter, Chairwoman Velázquez calls on Treasury and the IRS to bring their position in line with Congress’s intent and extend the benefits promised under the CARES Act to small businesses participating in PPP. “It is unacceptable that America’s small businesses continue to suffer due to this ruling as this pandemic continues,” wrote Chairwoman Velázquez. “The Committee has heard from small businesses across the country who took a PPP loan to keep their businesses alive and pay their employees, but because of Treasury and IRS rules that disregard of the intent of Congress, now face uncertainty and potentially higher taxes. Denying Congressional intent regarding the correct tax treatment of these loans will add insult to injury for millions of America’s small businesses who have struggled due to the COVID-19 pandemic.”
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