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Used Revenue Ruling 20-27 for PPP

cobyjweaver10
Level 1

I filed a 2019 federal tax return for a corporate client when Revenue Ruling 20-27 was relevant for PPP loans, so I excluded expenses related to the PPP loan (i.e. wages paid). After the return was filed, new guidance was released stating that the expenses were deductible and the forgiveness was nontaxable. Other than amending the 2019 return, is there anything else I can do to correct how I originally handled this? Please provide support for your answer.

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3 Replies 3
IRonMaN
Level 15

"Please provide support for your answer."

Somehow I feel like I'm back in college and that was a long, long time ago.  Folks that require support, really need to spend time doing some research rather than asking folks here to do the research for them. 

As far as your actual question goes, once you have amended the return you are done. You have corrected everything that needs to be corrected.

ACME Taxes, Tattoos, Tires and Tasmanian Devils - one free devil with every return.
qbteachmt
Level 15

I'm confused: "Other than amending the 2019 return"

"The covered period for making loans was initially the period beginning on February
15, 2020 and ending on June 30, 2020. See section 1102(a)(2) of the CARES Act. The
Paycheck Protection Program Flexibility Act of 2020, Pub. L. No. 116-142, 134 Stat. 641
(June 5, 2020), extended the end date of the covered period for making loans from June
30, 2020 to December 31, 2020."

"Please provide support for your answer."

Rev. Rul. 2020-27

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sjrcpa
Level 15

I'm guessing this was a fiscal year return.

Amend and claim the expenses.

Check the state treatment, which could have changed.

Support? Rev Rul 2020-27 was obsoleted by Rev Rul 2021-2.


ex-AllStar