So, we’ve been telling folks for a while that the FIRST round of PPP loans that were forgiven had special rules.

When the PPP program was started, any sentient being could see that Congress failed to allow those of us who got the loans and then were forgiven to be able to deduct those forgiven costs.  It’s why our original explanations detailed that there WAS a cost to the loan.

But, then Congress recognized the errors of their ways and specifically allowed us to include those expenses that we used to get our PPP loans forgiven as part of our profit and loss reporting on 2020 tax returns.

Yet…

So many of the folks out there are clueless. They don’t read the papers (or they only read the papers that present them with the “facts” they believe to be true) or keep up with the world. (It’s why so many folks didn’t realize that the tax deadline was no longer 15 April again this year- and the big online tax programs had spikes of use near the old deadline.)

And, given the fact that IRS is barely limping along- with millions and millions of UNPROCESSED 2019 tax returns that were mailed in due to the pandemic closure- it’s been unable to really make a dent in those returns.  (Even as they notify these same customers that they haven’t filed their taxes!)

Which brings up what the IRS has decided to do for those folks who didn’t pay attention to the rules clarification.  For those folks who followed the original guidance issued by Notice 2020-32 and Rev. Rul. 2020-27.  As stated above those documents indicated that it would illegal to deduct expenses (normally allowed under the Code) to the extent that these expenses were nullified by PPP forgiveness.  (These guidances were overruled in December 2020 (per the passage of the Consolidated Appropriations Act 2021, PL 116-260).

So, now comes Rev. Proc. 2021-20.  This document notifies those whose PPP loans were forgiven in 2020 to NOT file amended tax returns for 2020; that would just bollox up the IRS system further.  No, instead, the IRS permits those folks who followed the original (and improper) guidance of 2020-32 and 2020-27 to deduct those PPP forgiveness expenses when the companies file 2021 returns!

Please note that these provisions only apply to the original PPP loan.  They do not apply to the PPP second-draw loans (which were provisioned as part of the Consolidated Appropriations Act of 2021 (PL116-260).

Maybe y’all should pay a little more attention to what I write on my blog… Or, you will have to wait a year for financial benefits.

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