Paycheck Protection Deductions: If No Help From Congress Should You Help Yourself?
I’m going to stick my neck out and predict that quite a few taxpayers will take the deduction, many of whom will be blissfully unaware of the notice. If the IRS decides to pay attention to the matter, somebody will litigate it and I really think it could go either way.
Expenses Paid with a Forgiven PPP Loan are Deductible, IRS is Wrong
No court has ever ruled, nor would it ever rule, that cancellation of debt that is claimed to be non-taxable pursuant to existing exclusions, whether that be due to insolvency or bankruptcy under Section 108 or pursuant to Section 1106 of the CARES Act, somehow requires a taxpayer to amend prior-year returns to remove deductions attributable to the non-taxable cancellation of debt.
Follow Me
Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.