Coalition Letter to House Ways Chair Neal and Senate Finance Chair Grassley Regarding IRS PPP Notice on the CARES Act
Issue Date: May 07, 2020
On May 7 as part of a broad coalition, NAR sent a letter to House Ways and Means Chair, Richard Neal and Senate Finance Committee Chair, Charles Grassley. The letter thanks the legislators for their support of Congressional action to aid the economy during the novel coronavirus (COVID-19) crisis. As Representatives Neal and Grassley have stated, the IRS’s interpretation of the CARES Act is contrary to the intent of Congress. It makes little sense to exclude an employer’s PPP loan forgiveness income from tax liability with the one hand, only to lose the same amount in deductions with the other hand. It is imperative that the rescue measures enacted by Congress, including PPP loans, provide the maximum amount of flexibility to employers. IRS Notice 2020-32 is contrary to Congressional intent and, absent subsequent guidance from the IRS, the signatories encourage legislation that would amend the CARES Act such that it would explicitly waive Code Section 265 from applying to PPP loan forgiveness.