Mobile, Ala. (WKRG) — A bipartisan bill has been introduced in the U.S. Senate that would reverse an Internal Revenue Service memo that says businesses that receive loans through the Paycheck Protection Program will not be allowed to deduct the expenses the loans pay for.
Ranking members of the Senate Finance Committee notified Treasury Secretary Steve Mnuchin that the IRS guideline was contrary to the intent of Congress when they passed the PPP as part of the Cares Act.
Businesses that use PPP loan money to pay expenses that include payroll would not be allowed to deduct those normally deductible expenses, concluded an IRS memo on April 30th.
On May 6th, leaders of the committee introduced the Small Business Expense Protection Act. The legislation would effectively clarify that expenses paid with the forgivable PPP loans would remain deductible.