The Treasury is calling the shots and taking away everyone’s ability to play timing games with PPP forgiveness.
- Linked is a very comprehensive synopsis from the Journal of Accountancy – they geek out on this stuff so I don’t have to.
- Also linked is the actual revenue ruling directly from the IRS – look to the last page for the hammer drop
Basically… there are three big takeaways:
- The Treasury has shown it has zero intention of backing down on its position that ultimately the PPP funds which are forgiven are taxable (hey 60-75% of something is better than 100% of nothing) – note: there is a Safe-Harbor if a tax-payer ultimately ends up not getting forgiven;
- The Treasury is being pro-active and has essentially ended any timing shenanigans that CPAs and their clients were looking into – i.e. don’t apply for forgiveness until 2021… etc.; and
- Without Congressional action, the buck stops here.
So in addition to year-end planning, next year budgeting and forecasting, and holidays spent by ourselves – add PPP forgiveness applications to your to-do lists. Local banks are reporting that only about 10-15% of recipients have applied for forgiveness so far, I bet that is about to change. Have a great weekend!
Be well, stay safe, support local