The last few months have been… interesting. From the coronavirus outbreak to some of the largest stimulus packages in existence, controllers at many organizations have had to make a variety of tough decisions to keep their business moving forward. However, as this all starts to shift back to normal, the requirements don’t ease up.
For those who took a Paycheck Protection Program loan, you’re about to face a lot of paperwork, documenting your spending and exposing your organization to a lot of oversight if you hope to get forgiveness. But the National Conference of CPA Practitioners (NCCPAP) is looking to make your job easier.
As reported in Accounting Today, the NCCPAP has written a letter urging Congress to automatically forgive smaller loans under the Paycheck Protection Program, and to make sure that business expenses paid for with forgiven PPP funds are deductible.
In the letter, co-written by NCCPAP president Neil Fishman, and the co-chairs of its Tax Policy Committee, Stephen Mankowski and Sanford Zinman, the organization notes that with many of the smallest organizations taking loans still fighting to stay afloat, many may not have the money to afford professional assistance.
Written to Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore., and Reps. Kevin Brady, R-Texas, and Richard Neal, D-Mass., the group suggested that all PPP loans under $150,000 should be automatically forgiven. With 86.2 percent of all PPP loans being less than $150K, this letter could mean significant relief for nearly all organizations.
“We have spoken with many of these business owners and they are intimidated by merely glancing at the current forgiveness application,” they wrote. “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 continued. “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.”
Paired with this, the NCCPAP has also endorsed S.3612, the Small Business Expense Protection Act of 2020, which aims to amend the Coronavirus Aid, Relief, and Economic Security Act to provide that tax deductions for ordinary business expenses and other tax incidents shall not be affected by the exclusion from gross income of amounts related to loan forgiveness received in response to COVID-19 (i.e., coronavirus disease 2019).
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