NCCPAP Endorses S.3612

By NCCPAP Staff posted 07-28-2020 11:06 AM

July 28, 2020—

RE: CARES Act, PPP Forgiveness and Expense Deductibility

As the month of July comes to a close, there are several aspects of the CARES Act, that are scheduled to end, which will impact both businesses and individuals. Currently, Congress is busy working on additional legislation that would assist those businesses and individuals who are still affected by the pandemic.

As this legislation is being discussed, there are two issues that we would like to bring to the attention of Congress for immediate consideration for this pending legislation. When the CARES Act was originally written, there were several portions of it that were ambiguous and subject to interpretation. With regard to the Paycheck Protection Program (PPP), established by Section 1102 of the CARES Act, the original intent of Congress was for any funds used under this program, and subsequently forgiven, to be treated as deductible expenses of the business. However, the Internal Revenue Service, misinterpreting Section 1106 of the Act which states that any monies received under PPP “shall be excluded from gross income” by reason of forgiveness, concluded that the expenses be excluded from business deductions for income tax purposes. This ruling is in direct contrast to the intent of Congress.

On May 5, 2020, Senator John Cornyn of Texas introduced S.3612, “Small Business Protection Act of 2020”. This bill specifically states that “no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income.” The legislation, if passed, would overturn the ruling issued by the IRS under Notice 2020-32. This has a direct impact on all businesses. Furthermore, if the business is an S Corporation, Partnership, or Sole Proprietorship, the individual taxpayers would also be affected. As of this time, this legislation has bi-partisan sponsorship, and the number of sponsors is growing.

Additionally, there has been discussion for those businesses who received PPP loans that all loans under $150,000 be automatically forgiven. This is a good idea for many reasons. First and foremost, these are businesses, that in many instances, were hit the hardest by the pandemic, and, even under normal circumstances, may not have the resources necessary to pay a professional to assist in the forgiveness process. We have spoken with many of these business owners and they are intimidated by merely glancing at the current forgiveness application. This would leave them open to a miscalculation of the amount of forgiveness for which they would be entitled. In addition, as CPA professionals, we speak with bank management on a regular basis. They have intimated that they simply do not have the capability to properly review the barrage of forgiveness applications that they will receive. If all amounts under $150,000 were to be automatically forgiven, they would have a better opportunity to properly scrutinize and review the larger PPP program loans that were issued.

With regard to S.3612, this bill clarifies what Congress intended when the CARES Act became law. As previously stated, some aspects of the CARES Act were not written with specificity, thereby leaving them subject to interpretation.

The National Conference of CPA Practitioners (NCCPAP) endorses S.3612 and in the strongest possible terms requests that it be passed on its own or, at a minimum, incorporated into any future legislation being considered. In addition, we support adding automatic PPP loan forgiveness for any loan amount under $150,000 to any future legislation.

Very truly yours,

Neil. H. Fishman, CPA, CFE, FCPA, CAMS
President, NCCPAP

Stephen F. Mankowski, CPA, CGMA
Co-chair, Tax Policy Committee, NCCPAP

Sanford E. Zinman, CPA
Co-chair, Tax Policy Committee, NCCPAP


The National Conference of CPA Practitioners (NCCPAP) is a professional organization comprised of Certified Public Accountants practicing in the United States. In addition to serving as a forum for education, networking, and community impact, NCCPAP also advocates for its clients. NCCPAP influences tax administration and tax policy by regularly meeting with Internal Revenue Service representatives, state taxing authorities, and elected officials. NCCPAP members represent over one million businesses and individual clients. The organization is headquartered in Woodbury, NY. For more information visit,

Agency Contact Administration Contact
Francine Carb Pat Sornberger
610-687-2200 516-333-8282

Download this release as a PDF.