Congressional Leaders Tell Treasury That PPP Borrowers Should Be Entitled To Deductions

Source: Forbes - View Original Article
Published: May 06, 2020
Category:
Bias Rating:

66% Conservative


Bias Score Calculation:


Policies:

Taxes

Sentiments

96% "As the legislative leaders put it: Providing assistance to small businesses, only to disallow their business deductions as provided in Notice 2020-32, reverses the ..."
88% "The Service, for its part, maintains that its position prevents a double tax benefit.""
86% "That is, if it remains.""
77% "Whether section 265 is enough to ground the IRS's position, or whether future legislation or judicial challenges will alter its course, remains to be ..."
68% "Today, a bipartisan group of congressional leaders formally alerted the Treasury Department that they believe the position taken in the [IRS] Notice ignores the ..."
65% "The IRS's stance on PPP deductions will likely not be the last word.""
64% "The group of congressional members is headed by Chuck Grassley and Richard Neal, the chairmen of the top tax committees in the Senate and ..."
63% "And to top it off, the provision is an absolute model of legislative in-clarity, with ambiguous phrases strung together in a manner that makes ..."
54% "That section has probably been the subject of more google searches over the past week than throughout its entire prior existence.""

We have listed the top 10 sentiments. More sentiments do exist. Please review the full article for more information.



*Our bias meter rating uses data science including sentiment analysis, machine learning and our proprietary algorithm for determining biases in news articles. The rating is an independent analysis and is not affiliated nor sponsored by the news source or any other organization

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Contributing sentiments towards policy:

96% : As the legislative leaders put it: "Providing assistance to small businesses, only to disallow their business deductions as provided in Notice 2020-32, reverses the benefit that Congress specifically granted by exempting PPP loan forgiveness from income."
88% : The Service, for its part, maintains that its position "prevents a double tax benefit.
86% : That is, if it remains.
77% : Whether section 265 is enough to ground the IRS's position, or whether future legislation or judicial challenges will alter its course, remains to be seen.
68% : Today, a bipartisan group of congressional leaders formally alerted the Treasury Department that they "believe the position taken in the [IRS] Notice ignores the overarching intent of the PPP, as well as the specific intent of Congress to allow deductions in the case of PPP loan recipients."
65% : They also happen to sit on opposite sides of the political aisle.
65% : The IRS's stance on PPP deductions will likely not be the last word.
64% : The group of congressional members is headed by Chuck Grassley and Richard Neal, the chairmen of the top tax committees in the Senate and the House, respectively.
63% : And to top it off, the provision is an absolute model of legislative in-clarity, with ambiguous phrases strung together in a manner that makes any good tax lawyer salivate and that screams out that the meaning of the statutory provision is, well, in the eye of the beholder.
54% : That section has probably been the subject of more google searches over the past week than throughout its entire prior existence.
54% : An argument can certainly be made -- and it will be -- that denying a deduction, as the IRS's position does, circumvents the CARES Act's language, which provides that forgiven loan proceeds "shall be excluded" from income.
44% : There are supporters in both camps, but many have complained that the IRS's position seems contrary to the overriding Congressional intent behind the program and the CARES Act more generally.
42% : But its position, which left many in congress wondering if the IRS missed the 335-page memo, may not be the last word.
41% : Stay tuned.
40% : The IRS, however, largely found refuge for its position in a pre-existing section of the Internal Revenue Code: Section 265, which has historically denied a tax deduction if the deduction is allocable to a class of income that is wholly exempt from income taxes.
36% : In other words, they believe the IRS got it dead wrong.
34% : This is because denying a deduction for an expense is the economic equivalent of taxing income.
31% : The IRS ruled that a Paycheck Protection Program (PPP) borrower who spends PPP funds on normal business expenses cannot deduct those expenditures for federal tax purposes.
28% : Yet on this issue they spoke in unison, formally rejecting the IRS's position that PPP borrowers should not be entitled to the tax deductions and stating that they "did not intend to deny the deductibility of ordinary and necessary business expenses, nor did these small businesses expect to lose deductions for their business expenses when they applied for a PPP loan.
25% : The purpose of the PPP loan initiative, they argue, was to provide economic -- specifically tax -- benefits to businesses in order to make it possible to keep workers on the payroll.
25% : There is no denying that the IRS's ruling gutted a significant portion -- roughly a third -- of the tax benefits that would have otherwise been available under the PPP.
23% : That "fact" should convey some sense of its relative obscurity.
19% : But as far as these congressional leaders are concerned, that's a bad thing, not a good thing.

*Our bias meter rating uses data science including sentiment analysis, machine learning and our proprietary algorithm for determining biases in news articles. The rating is an independent analysis and is not affiliated nor sponsored by the news source or any other organization

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