IRS Issues Guidance Noting That Improperly Forgiven Paycheck Protection Program Loans Are Taxable
The Internal Revenue Service issued new guidance addressing improper forgiveness of a Paycheck Protection Program loan. The guidance confirms that, when a taxpayer’s loan is forgiven based upon misrepresentations or omissions, the taxpayer is not eligible to exclude the forgiveness from income and must include in income the portion of the loan proceeds that were forgiven based upon misrepresentations or omissions. The IRS advises taxpayers who inappropriately received forgiveness of their PPP loans to take steps to come into compliance by, for example, filing amended returns that include forgiven loan proceed amounts in income.
The full guidance document is available here.
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