The National Conference of CPA Practitioners is urging Congress to automatically forgive smaller loans beneath the Paycheck Protection Program, also to ensure business expenditures paid for with bemused PPP funds are allowable.
In a letter to Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore., and Reps. Kevin Brady, R-Texas, and Richard Neal, D-Mass., the team indicated that PPP loans under $150,000 ought to be automatically forgiven.
The letter, co-written from NCCPAP’s president, Neil Fishman, and also the co-chairs of its Tax Policy Committee, Stephen Mankowski and Sanford Zinman, noted that companies together with loans of that dimension were modest, had frequently been people hit hardest by the pandemic, also may not have the ability to afford expert assistance to complete complex forgiveness software.
“We have spoken with many of these business owners and they are intimidated by merely glancing at the current forgiveness application,” they composed. “This would leave them open to a miscalculation of the amount of forgiveness for which they would be entitled.”
“In addition, as CPA professionals, we speak with bank management on a regular basis,” they lasted. “They have intimated that they simply do not have the capability to properly review the barrage of forgiveness applications that they will receive. If all amounts under $150,000 were to be automatically forgiven, they would have a better opportunity to properly scrutinize and review the larger PPP program loans that were issued.”
NCCPAP also voiced its support for S.3612, the Small Business Protection Act of 2020, a bill introduced by Sen. John Cornyn, R-Texas, that would explain that company expenditures paid for using PPP funds which are forgiven are allowable.
The IRS has translated a part of their CARES Act that generated the PPP that says any loans obtained under the application and forgiven “shall be excluded from gross income” to imply that company expenses paid for using these funds should be deducted from company deductions for income tax purposes.
“This ruling is in direct contrast to the intent of Congress,” NCCPAP composed, also encouraged Congress to pass S. 3612, or integrate a similar provision to prospective laws.
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