A couple of updates on the PPP deductibility issue:
We have reached a critical stage in the negotiation of an end of year tax/spending package, and whether a provision overturning the IRS decision on PPP deductibility is included or not. We have heard from multiple sources on the Hill that Secretary Mnuchin continues to oppose any legislative provision that allows PPP loan forgiveness expenses to be tax deductible. Everyone is strongly encouraged to weigh in with Congress, the White House, and/or Treasury to press the importance of addressing this issue now, before the end of the year.In more encouraging news, a bipartisan group of House and Senate members (the so-called “908 coalition” named after the $908 billion price tag of their proposal) released legislative text of their earlier plan/agreement. The legislation contains a provision that mirrors Senator Cornyn’s legislation, S. 3612, the Small Business Expense Protection Act that we believe would allow for full deductibility of business expenses on forgiven PPP loans for both “first” and “second draw” loans. Some organizations have issued statements of support of this bipartisan framework, (such as here and here) in part due to the inclusion of this provision.Regarding the coalition letter, I updated it with additional signatories (link available here). There are now 690 signatories on the letter (245 national and 445 state/regional/local affiliates).If you have any questions or comments, please feel free to reach out. Thank you for your continued support,

Matt

Matthew Turkstra
Director, Congressional Relations, Tax, Fiscal Affairs, and Accounting
The Associated General Contractors of America
53 D Street, SE
Washington, DC 20003
Direct: (202) 547-4733 │ Cell: (202) 316-1144