Updated Guidance and Resources from the IRS

Revenue Ruling 2021-02 (click here) obsoletes Notice 2020-32 and Rev. Rul. 2020-27 due to the enactment of the COVID-related Tax Relief Act of 2020 (Act).  The Act retroactively amends the CARES Act to provide that no amount is included in the gross income of a Paycheck Protection Program (PPP) participant by reason of forgiveness of a PPP loan, and no deduction is denied, no tax attribute is reduced, and no basis increase is denied, by reason of the exclusion from gross income.  Accordingly, the holdings in Notice 2020-32 and Rev. Rul. 2020-27 are no longer determinative with regard to the treatment of certain expenses paid with PPP loan proceeds.