PPP Loan Forgiveness - 1120 Tax Return

As the return isn't even DUE for months, I'd wait & see what happens.  

There's a lot of discussion that the IRS dictate that forgiveness means the expenses aren't deductible will be overridden. 

Keep up with developments by subscribing to the Politico morning tax newsletter (it's free after 10am daily).  Today it reported

LET’S SEE WHAT DEVELOPS: Any final decisions on the PPP deduction issue is probably a ways off, but Sen. John Cornyn (R-Texas) is looking to push the envelope.

Cornyn, a senior Finance Committee member, told Jad Chamseddine of Tax Notes that he hoped to get unanimous consent in the Senate this week for a measure, S. 3612 (116), to allow companies to deduct expenses paid for by PPP loans.

To pull that off, Cornyn and other supporters would need to get rid of any remaining holds on the bill by today, which will cap off the Senate’s week in Washington. Cornyn told Tax Notes early in the week that supporters were “chipping away” at holds. But as of Wednesday, Cornyn’s office told Morning Tax that allowing the legislation to go forward still didn’t have unanimous support in the Senate.

Both Finance Chair Chuck Grassley (R-Iowa) and Sen. Ron Wyden of Oregon, the top Democrat on Finance, are sponsors of the PPP deduction bill, and also argue that Congress intended to allow businesses to benefit both from the loans and the tax write-offs to boost the economy. But their spokespersons largely deferred to Cornyn and his team on this week’s effort to get the measure through the chamber.

Getting a measure passed in the Senate by unanimous consent would certainly seem to be a show of force, but any final decision on the PPP deduction issue would also need to get the House and the administration on board. Mnuchin has said that allowing companies to write off expenses bought with PPP loans would be double dipping — backing the IRS, which disallowed those deductions.

I have same fiscal year issue June 30, 2020? Nearing end of extension and need to decide how to advise client. Currently IRS and Treasury positions indicate PPP expenses are not tax deductible. Loan forgiveness is not taxable.

Wondering if the new covid 19 relief package is going to make IRS and Treasury positions change. And whether these changes would affect the first PPP expenses in PPP package granted in 2020.

Sure hate to have to amend, but may not have any choice?