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Important PPP Forgiveness Update

Important PPP Forgiveness Update

PPP Forgiveness Update

On November 5th, BiggsKofford wrote an article providing an update on the PPP Loan Forgiveness rules. That article can be found HERE. In that article we recommended deferring your forgiveness application until 2021, thereby possibly allowing the deduction of qualified expenses or at least buying time for Congress or the IRS to clarify the issue.

Well… The IRS has weighed-in on that concept.

The IRS just released Revenue Ruling 2020-27 which essentially eliminates the possibility of deducting those expenses. Instead, this Ruling indicates taxpayers must reduce their deductions in 2020 even if they are still planning to obtain forgiveness in 2021. Anyone that claims those deductions and later obtains forgiveness would need to amend their 2020 tax return to remove those deductions.

Absent any intervention by Congress or the Tax Court, taxpayers will now be required to file their returns following this Ruling, as taking a contrary position would not be compliant. That said, this subject is being argued by many taxpayer advocacy organizations who will continue to lobby Congress and/or take this issue through the Courts to test the IRS’ legal grounds.  We will keep a close eye on those efforts and inform you of any changes.

In the meantime, BiggsKofford recommends considering both “with and without” scenarios related to the deduction of these expenses as you calculate your 2020 tax plan. We believe taxpayers should be prepared for the worst – while we can hope for the best.

The post Important Ppp Forgiveness Update appeared first on Colorado Springs CPA | BiggsKofford Accounting Firm.



This post first appeared on Biggs Kofford CPA - Accounting Firm, please read the originial post: here

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Important PPP Forgiveness Update

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