888-237-3533 / carrie@financewithafp.com
Apply Now Instant Quote
AFP Red Thread
  • Home
  • Insights
  • Resources
  • Events
  • Contact Us
888-237-3533 / carrie@financewithafp.com
Apply Now Instant Quote
AFP Red Thread
  • Home
  • Insights
  • Resources
  • Events
  • Contact Us
  • Apply Now
  • Instant Quote

Over 560 Organizations Urge Congress to Pass PPP Expense Forgiveness

byKelley Nemitz inFINANCING posted onDecember 10, 2020
0

This article was originally published on Equipment Finance Advisor.

The American Institute of CPAs (AICPA) and a coalition of more than 560 organizations representing millions of employers and American workers sent Congressional leaders a letter urging passage of legislation making it clear that expenses related to a forgiven Paycheck Protection Program (PPP) loan are tax-deductible. The letter states that without legislation, there is “…the specter or a surprise tax increase of up to 37 percent on small businesses when they file their taxes for 2020.”

“At the onset of the COVID-19 pandemic, Congress responded with speed, cooperation, and an eye to preventing the worst potential economic outcomes. We ask that you bring that same spirit of urgency and cooperation during this ‘lame duck’ session to prevent an avoidable catastrophe for millions of small businesses that, without Congressional action, will face a surprising and, in many cases, insurmountable tax bill next year,” states the letter.

While the Coronavirus Aid, Relief and Economic Security (CARES) Act was designed to provide relief to businesses by allowing the deductibility of expenses related to loan forgiveness, Notice 2020-32, issued by the Internal Revenue Service (IRS), directly contradicts this intent, instead transforming tax-free loan forgiveness into taxable income. AICPA has made repeated calls for Congress to fix this problem.

“Notice 2020-32 clearly circumvents the original intent of Congress with regard to the PPP program,” said AICPA Vice President of Taxation Edward Karl, CPA, CGMA. “The COVID-19 pandemic has had a severe economic impact on our country and now, more than ever, thousands of businesses need a little extra relief to help them survive. It’s critical that Congress acts on this issue immediately and we strongly encourage them to do so.”

Karl added, “We continue to hear from state CPA societies, our members and CPAs’ clients that the PPP loan allowed them to pivot their business, stay open and keep employees hired during the pandemic. PPP loans have helped organizations manage issues such as supply chain interruptions, sick employees and customers’ changing buying habits. To burden businesses with additional, potentially significant taxes at this time does not reflect Congressional intent.”

A letter cosigned by State CPA Societies from all 50 states and four territories as well as the AICPA has also been sent to Congressional leadership urging immediate action on this issue.

Equipment Financing Explained

Previous

Related Posts

May 14, 2019
THE EQUIPMENT PURCHASE: PAYING CASH VS. FINANCING

For years, popular “money experts” have preached that you should “never buy with...

No Comments
May 12, 2020
Here is why financing is more important than ever.

Our world has changed tremendously in just a few short...

No Comments
May 27, 2020
Free weekly credit checks are now available!

If you’re feeling anxious about your financial health during these uncertain...

No Comments

Leave a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Over 560 Organizations Urge Congress to Pass PPP Expense Forgiveness
  • Equipment Financing Explained
  • 5 Advantages of Purchasing New Equipment for your Business
  • Free weekly credit checks are now available!
  • Here is why financing is more important than ever.

Recent Comments

    Archives

    • December 2020
    • August 2020
    • July 2020
    • May 2020
    • March 2020
    • May 2019

    Categories

    • FINANCING

    © 2020 American Financial Partners, Inc. All Rights Reserved. Privacy Policy Disclaimer