Client Alerts & Insights
Tax Guidance on Paycheck Protection Program (PPP)
November 19, 2020
Authored By:
The IRS has previously released guidance saying that expenses paid with Paycheck Protection Program (PPP) proceeds which would otherwise be deductible will not be permitted to be deducted. There was much hope in the business community that this ruling would be overturned since it effectively reduces the benefit of PPP by a company’s marginal tax rate.
Unfortunately, the IRS released another revenue ruling on November 18, 2020 affirming its previous stance. The ruling can be found here and essentially states that if there is a reasonable expectation that a PPP loan will be forgiven then the PPP borrower cannot deduct expenses paid for with PPP proceeds for tax purposes.
Given that this is the second time the IRS has taken this stance, it is likely that legislation would be needed from Congress to change directions.
The impact on taxes can have a significant impact on cash flows and also on financial covenant calculations under credit facilities.
For more information, please contact your Benesch representative.
Matthew P. Delguyd at mdelguyd@beneschlaw.com or 216.363.4627.
Latest News
FTC Enforcement Trends in 2026: What Businesses, Advertisers Should Be Watching Now
Regulators continue to signal a return to core consumer‑friendly principles through new rulemaking initiatives, and recent enforcement activity, warning letters, and public commentary offer a practical preview of where scrutiny is likely to concentrate in 2026…
IEEPA Tariffs – Top Five Q&A for Supply Chains after U.S. Supreme Court Decision
The U.S. Supreme Court issued its highly anticipated decision regarding tariffs Friday. The Court held that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs according to the 6-3 decision…
Watch Your T&Cs! When Done Right, Terms and Conditions are Both Viable—And Valuable
The era of the paper/hard copy bill of lading and/or rate confirmation is fading fast. Hard copies and paper do live on in various shipment schematics; however, increasingly, and at a very rapid rate, transactions between shippers, carriers, brokers and forwarders are conducted by, and memorialized in, electronic form via email, interactive website access and response, and—more and more—AI mechanisms.
The Long Tail of the Opioid Crisis: How AGs Continue to Pursue Manufacturers, Distributors, Pharmacies
The opioid crisis has been a perennial priority for state attorneys general, and was the marquis priority for the National Association of Attorneys General (NAAG) in both 2023 (under OH AG Dave Yost) and 2025 (under NH AG John Formella). Recently, Texas Attorney General Ken Paxton announced the conclusion of a multistate effort to secure the bankruptcy reorganization plan for Purdue Pharma (Purdue).