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PPP Loans and Change of Ownership

Transactions involving changing the ownership of borrowers with outstanding Paycheck Protection Program (PPP) loans will be subject to new requirements under a procedural notice (Notice) issued by the Small Business Administration (SBA) on October 2, 2020.1 The Notice addresses the circumstances under which lenders may approve a change of ownership, when and how SBA approval must be obtained, and…

Proposed Regulations Provide Guidance on Entities That Can Use Small Business Accounting

Recent IRS proposed regulations outline new accounting method procedures for businesses who want to use the cash method for accounting and how they can qualify to do so under expanded statutory requirements.

The IRS recently issued proposed regulations to implement changes made to the permissible accounting method used by small businesses under the Tax Cuts and Jobs Act of 2017 (“TCJA”). While…

Electric Cooperatives May Be Eligible For PPP Loans

Electric cooperatives that are tax exempt under 501(c)(12) of the Internal Revenue Code (Code) are considered business entities organized for profit and therefore eligible for loans under the Paycheck Protection Program (PPP) as long as other eligibility requirements are met.

The Treasury Department published its Eleventh interim final rule: “Business Loan Program Temporary Changes; Paycheck…

One Big Question Answered – Unfortunately with a No.

The IRS released Notice 2020-32 addressing expenses paid with PPP loan proceeds which are subsequently forgiven. The CARES Act exempts the forgiveness of the PPP loan proceeds from federal taxable income. There had been some question as to whether the expenses paid which gave rise to the forgiveness would be allowable as deductions for federal income tax purposes. The question arose from IRC…

PPP New Funding

The Senate approved $483 billion for the Paycheck Protection Program offered through the SBA, and the House is expected to vote later this week. Any application denied because of lack of funds or not submitted, should be resubmitted immediately. Note, some banks are still processing first round loan applications, so if you had not heard anything from your bank, you should confirm your application…

Additional Guidance on Paycheck Protection Program Loans

The Treasury Department has just issued additional guidance on the Paycheck Protection Program (PPP) loans.  The entire FAQs are available here. The inclusion of benefits in the $100,000 compensation cap has been the source of many questions. The Q&A on this issue appears below for ease of reference.

Question: The CARES Act excludes from the definition of payroll costs any employee compensation in…

The Ins and Outs of the CARE Act Paycheck Protection Program – What Lenders and Borrowers Need to Know

The Paycheck Protection Program(“PPP”) in the CARE Act authorizes up to $349 billion dollars in forgivable loans. What do you really need to know to be a lender or a successful borrower under the PPP? Jackson Kelly’s lawyers have been sorting through the guidelines and available information and layering on years of experience in representing business to help guide our clients through the CARE…

Cash Flow Considerations During the Coronavirus Pandemic

Your business was shut down over night for at least two weeks if not longer. What should you do to help preserve cash flow and help keep the doors open post coronavirus shut down?

Here are a couple of suggestions. Note, with regard to employees and paths taken, please refer to recent articles from Justin Harrison that address a number employee issues.

First, if you have loans, talk to your bank.…

Increased Limited Liability Company Tax Audits Are Coming

The increase in usage of limited liability companies (“LLCs”) as the business form of choice has led to changes in the IRS statutes concerning audits of LLCs. On November 2, 2015, President Obama signed the Bipartisan Budget Act of 2015 (“BBA”) into law. The BBA brings drastic changes to the audit process of partnerships which will allow the IRS greater enforcement and collection authority in…

 

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