I couldn't qualify for a PPP loan because I was only in second year as an independent contractor, had not yet incorporated and didn't have any employees. But I was forced to stay home and not work for a while, during which time I got an EIDL loan. Any idea if they're going to eventually be forgiven?

quote:

Originally posted by Beancooker:
When you are a wholesale company that supplies goods to restaurants, and every restaurant in the US is effectively closed, you no longer have a business. You now have 32 employees with rent to pay, and mouths to feed, and zero work.

And now you have 32 people who approve of government handouts and become loyal voters for those who hand out the goodies.

But put those people out of work because some government desk jockey (who is still collecting his full paycheck) says "Lockdown" and you have 32 people ready to throw the bastards out of office. Hungry people pick up pitchforks and correct bad government.

Make no mistake, all those handouts were bribes and pacifiers so that the government elites could impose their will on all of us. Bread and circuses...

eta: Somebody somewhere has to pay for those $$ given out. Who will pay? All of us are paying now with inflation, and when government debt eventually gets paid in the future it will be taxpayers.

You can lookup recipients and amounts here. Have fun. For example, large law firm here got $8.6MM, I expect every bit of that was forgiven. They don't have a lot of minimum wage workers.

I lot of higher income folks rationalized this with fact that they are disproportionately going to be funding this in taxes, they might as well get a relatively small part of that back in advance.

Lookup PPP

^^^^^^^^^^^^^^^
Thanks for the link. I know quite a few of these folks feeding at the trough. Hope they audit some of them.

quote:

Originally posted by Georgeair:
You can lookup recipients and amounts here. Have fun. For example, large law firm here got $8.6MM, I expect every bit of that was forgiven. They don't have a lot of minimum wage workers.

I lot of higher income folks rationalized this with fact that they are disproportionately going to be funding this in taxes, they might as well get a relatively small part of that back in advance.

Lookup PPP

Thanks for the link, Georgeair.

quote:

Originally posted by ZSMICHAEL:
Hope they audit some of them.

I do too but we know how that usually works these days for the bigger fish.
There have been some news stories of local recipients in hot water.

Also - noticed if you click on name link in that site it shows if it was "Paid in Full or Forgiven". Not sure what one that wasn't forgiven would look like, but under the stipulated payment plan it would not be paid off by now so assume all those are actually forgiven not paid.

The forgiveness really wasn't complicated, you just had to provide attestation and some support that amounts borrowed were in fact used for employee payroll and benefits.

Not sure what y'all want them to audit, but these are almost all companies not individuals. The only audit would be to verify that they did in fact submit an accurate application, and then spent the money where they report that they did. About as big a hurdle as me jumping over a cigarette butt.

The legislative change to NOT have to include in taxable income the forgiveness was a huge deal and will also have a tax impact. Using that local law firm as example they got a boatload of money, a fair bit of which went to pay the owners of the firm (subject to some limits) and for their benefits with "found" money. Then, since they get to deduct those payroll amounts but not include income from the forgiveness they effectively create a loss (or less income) in the 2020 year of $8.6MM. That loss will be carried forward/back reducing taxes, or otherwise just reduce current year taxable income and taxes that would otherwise have been due.

How does THAT twist your hair then!??

WWhat I'd like to see published is an audit showing how much of the forgiven PPP loan money ended up being contributed to the very same politicians that supported this taxpayer giveaway. Probably just a coincidence, nothing to see here.

quote:

There have been some news stories of local recipients in hot water.

Oops! Supported the wrong candidate.

quote:

contributed to the very same politicians that supported this taxpayer giveaway

I think you drastically underestimate the personal greed of your fellow man.

Now we know why the IRS is hiring. Just kidding. I'm sure there is nothing to worry about.

Ex-IRS whistleblower says middle class targeted under inflation bill
https://nypost.com/2022/08/16/...nder-inflation-bill/

Those that got PPP loans better have their duck in a row.

IRS Criminal Investigation (CI) pledges continued commitment to investigating COVID-19 fraud as CARES Act reaches one-year anniversary

https://www.irs.gov/newsroom/i...one-year-anniversary

quote:

Originally posted by Southern Rebel:
If the loan was used to pay wages, how can the business claim the wages as expense since they were reimbursed for that expense and, thus, had no cost the business?

They can't.

To get forgiveness on the loans a business needed to use the loan to pay qualifying expenses which is typically wages, but a few other things like rent qualified as well. The important point here is that any qualifying expenses could not then be used as a deduction on the business's tax return.

So let's say that a business took a $400,000 loan and used it to pay the wages of its employees and was able to generate $500,000 in revenue on the employees' labor. The $400,000 would be forgiven, but the business could not use that $400,000 in wages as a deductible expense on its tax return. So the business is left with $500,000 of taxable revenue with no expenses to reduce it.

Now in many cases you had businesses that were using the money to pay employees but had no work for them to do. So they generated no revenue. However since the wages were qualifying expenses the loans were forgiven.

This message has been edited. Last edited by: Broadside,

GOP Rep. Wenstrup: We Should Go after Hundreds of Billions in COVID Relief Fraud, Not Increased IRS Audits

https://www.breitbart.com/clip...ncreased-irs-audits/

Broad - in normal case you’d be sorta right but here you are way wrong.

“Normally” the expenses would be deductible, but the loan forgiveness would be revenue resulting in a net income effect of zero.

In THIS example however and solely due to legislation passed specifically applied to PPP loans, businesses can deduct the expenses AND not recognize any revenue on the loan forgiveness. In effect this creating a reduction in income for the amount paid from these magically appearing funds that don’t generate any revenue recognition.

In your example the business would have net income of $100,000 in spite of having put $500K in the bank. Sweet right?

quote:

GOP Rep. Wenstrup: We Should Go after Hundreds of Billions in COVID Relief Fraud, Not Increased IRS Audits

^^^^^^^^^^^^^^^^
I am good with that. How many prisoners and welfare cheats collected this money? Ordinary middle class people do not know the ins and outs of governmental assistance. It is more complicated than you realize, but if you know the ropes it is not hard.

You can search the database by state. So after scrolling through 15 pages of the Michigan list, it appears that most of the Federal $$$ went to the Lower Peninsula. No surprise there. Who got the most money in the Yoop? Power Companies and Health Care related organizations.

quote:

Originally posted by Georgeair:
Broad - in normal case you’d be sorta right but here you are way wrong.

“Normally” the expenses would be deductible, but the loan forgiveness would be revenue resulting in a net income effect of zero.

In THIS example however and solely due to legislation passed specifically applied to PPP loans, businesses can deduct the expenses AND not recognize any revenue on the loan forgiveness. In effect this creating a reduction in income for the amount paid from these magically appearing funds that don’t generate any revenue recognition.

In your example the business would have net income of $100,000 in spite of having put $500K in the bank. Sweet right?

I suspect it’s still income on the books, but it isn’t taxable for tax purposes.

The bookkeeping entries would look like:

On receipt of the loan: Debit cash, Credit loans - both balance sheet entries
On paying qualified expenses like wages: Debit the expense, wages, Credit cash - income statement, balance sheet
On forgiveness of the loan: Debit loans, Credit income from loan forgiveness - balance sheet, income statement

quote:

Originally posted by ZSMICHAEL:

quote:

GOP Rep. Wenstrup: We Should Go after Hundreds of Billions in COVID Relief Fraud, Not Increased IRS Audits

^^^^^^^^^^^^^^^^
I am good with that. How many prisoners and welfare cheats collected this money? Ordinary middle class people do not know the ins and outs of governmental assistance. It is more complicated than you realize, but if you know the ropes it is not hard.

Just scanning through the list of recipients in my County, I could almost guarantee Fraud is involved. In one instance, several members of the same family checks.

quote:

Originally posted by Georgeair:
Broad - in normal case you’d be sorta right but here you are way wrong.

“Normally” the expenses would be deductible, but the loan forgiveness would be revenue resulting in a net income effect of zero.

In THIS example however and solely due to legislation passed specifically applied to PPP loans, businesses can deduct the expenses AND not recognize any revenue on the loan forgiveness. In effect this creating a reduction in income for the amount paid from these magically appearing funds that don’t generate any revenue recognition.

In your example the business would have net income of $100,000 in spite of having put $500K in the bank. Sweet right?

Wow! You are correct. I googled around and found this on the IRS's website:

Eligible Paycheck Protection Program expenses now deductible

quote:

Wow! You are correct

That sort of surprise sounds like what I get at home…..

My big kid is self employed and couldn’t get anyhelp, for whatever reasons. We supported him thru it until he could go back to work. (The state threatend peoples certification for cutting hair during lockdown)

I just looked thru the county where my parents live and I’m just going out on a limb and think some graft has occurred.

My SIL got over 300k for her restaurant and it’s been forgiven. They moved into a ginormous house last year. It looks really really suspicious to me.

quote:

Originally posted by Rick Lee:
I couldn't qualify for a PPP loan because I was only in second year as an independent contractor, had not yet incorporated and didn't have any employees. But I was forced to stay home and not work for a while, during which time I got an EIDL loan. Any idea if they're going to eventually be forgiven?

Do you have an accountant? I realize it's an extra expense, but I have a good CPA who helps me and provides advice during the year. He was able to provide good information concerning PPP loan availability including forgiveness information. I'm not familiar with the EIDL loans but at first glance, they do not seem forgivable.

There were changes made to the PPP program a month or two after Biden got into office, and it really opened the flood gates concerning the availability of PPP loans including folks like yourself (I think).

The government - as usual - kept changing the rules. At first, you may have not qualified for anything, then they offered you the non-forgivable EIDL, then they may have made you eligible for PPP forgivable loans without telling you. It's a clusterfuck, but having a good accountant may still help you a bit.