On April 30, 2020, the Internal Revenue Service (IRS) issued Notice 2020-32, which provides that no deduction is allowed for expenses paid with loan money forgiven under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Notice 2020-32 explains that, because forgiven loans are not treated as income under the CARES Act, the denial of a tax deduction for expenses paid with forgiven loan proceeds prevents a double tax benefit, as consistent with Section 265 of the Internal Revenue Code.
Attorneys at Tarter Krinsky and Drogin have analyzed the latest notices issued by the IRS that relate to the COVID-19 pandemic, including Notice 2020-32 highlighted above. Please contact your relationship attorney or CV19team@tarterkrinsky.com if you have any inquiries on how this may affect your business.
|Chu, Justin Y.K. General Counsel and Partner||General Counsel and Partner||212.216.1160|
|Lydell, Sherri D. Partner||Partner||212.216.1151|
|Malinowski, Simon I. Associate||Associate||212.216.1133|
|Molinari, Guy Partner and Chair of Corporate and Securities Group||Partner and Chair of Corporate and Securities Group||212.216.1188|
|Rudolph, Elishama A. Associate||Associate||212.216.1145|
|Smith, James G. Partner||Partner||212.216.8060|