Internal Revenue Service

Treasury and IRS Issue Guidance Clarifying the Deductibility of Expenses Where a Business Received a PPP Loan


On November 18, the U.S. Treasury Department and Internal Revenue Service (IRS) released guidance clarifying the tax treatment of expenses where a Paycheck Protection Program (PPP) loan has not been forgiven by the end of the year the loan was received. Since businesses are not taxed on the proceeds of a forgiven PPP loan, the expenses are not deductible. Release.

IRS Issues Final Regulations and New Proposed Regulations Regarding Withholding on Derivatives on U.S. Stocks

On December 5, the Internal Revenue Service issued the final regulations and the 2013 proposed regulations under section 871(m), which address withholding on certain equity-linked notional principal contracts (NPCs) and other financial instruments.  These regulations are targeted at derivatives referencing U.S. stocks in which non-U.S. persons receive a “dividend equivalent” while arguably avoiding U.S. withholding tax but will impact many common corporate transactions, including merger and acquisition transactions and equity based compensation arrangements.  For more information and to read the complete Orrick alert, please click hereFinal RegulationsProposed Regulations.

IRS Releases Temporary Regulations Addressing Cancellation of Debt Income Deferral Election

On August 11, the Internal Revenue Service released a set of temporary regulations providing additional rules for an election to defer cancellation of debt income for corporations, partnerships, and S corporations under Section 108(i) of the Internal Revenue Code. Temporary Regulations 1. Temporary Regulations 2.