IRS POSITION OVERRULED
In my December 1, 2020 post, I cited to IRS Revenue Ruling 2020-27 in which the IRS stated that it would not allow a deduction for business expenses paid with proceeds from a PPP loan which was, or would be, forgiven. https://magdaabdogomezlaw.com/twelve-news-items-irs/
The IRS position was been overruled by Congress. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 signed on December 27, 2020 specifically provides that business expenses paid/accrued in 2020 can be deducted, even if the expenses were paid with a forgiven PPP loan. This is an important change as you begin preparing for the 2020 tax filing season.