Hey

The IRS just announced that all improperly forgiven Paycheck Protection Program loans are taxable. This will see many business owners paying thousands of dollars in taxes for portions of forgiven PPP loans.

Improperly forgiven PPP loans are those forgiven based upon misrepresentations or omissions. For example, you lied about the size of your business and got more money from the PPP program than you were eligible for – or you simply made a calculation error.

In some cases, as I said in my past videos, some business owners allowed their banks to apply for PPP loans on their behalf, and these banks applied for more money than the business was eligible for.

All this money should have been returned. You can watch my full video explaining this on YouTube.

But how come?

Yes, you may ask, how? Well, remember I have been doing videos warning you precisely about business owners who got more than they should have when they applied for PPP loans?

For example, if you were eligible for $40,000 but made a mistake or lied and applied for $50,000 and got it, you would have improperly gained the extra $10,000.

This is the extra money that the IRS is saying, even if you were forgiven, include it as income so that you pay tax on it.

This means businesses that gained hundreds of thousands illegally are liable for thousands of dollars in taxes. It’s messy!

Here is the LINK to read about the complete eligibility criteria for PPP loans. If your business misses any point on the list, you should call me immediately at (202)-618-1297 so we can arrange how to minimize the damage.

Will this PPP mess come to an end?

This is another question you could be asking. Well, it will come to an end, only if the IRS gets satisfied that they have collected back as much money as possible, especially from everyone who overstated their requirements and got away with more PPP loans than they should have.

What should you do now?

If your PPP loan was inappropriately forgiven, the IRS encourages you to take steps to come into compliance. These steps include filing amended returns that include forgiven loan proceed amounts in income.

Delaying this could result in painful penalties.

You can contact me now so we can discuss the way forward before you get into a deep mess with the IRS.

Hey Entrepreneur! I am Folasade Ayegbusi. I am an Enrolled Agent, Accountant, Ex-insurance Broker, Speaker, and Small Business Growth Strategist. Additionally, I am a Mother, and Entrepreneur.

I have helped entrepreneurs and small business owners save over $25 million dollars in lost revenue, tax assessments, penalties, and interests over the last 12 months. I am confident that I can assist you with all of your accounting needs.