Treasury Secretary Steven Mnuchin doesn’t appear eager to release more guidance on the loan forgiveness portion of the Paycheck Protection Program, despite claims from practitioners that many questions are still unanswered.
“I thought the guidance we put out dealt with all the issues,” Mnuchin said in response to questioning from Sen. Kyrsten Sinema, D-Ariz., at a May 19 hearing of the Senate Banking, Housing, and Urban Affairs Committee.
Mnuchin said he would provide answers to Sinema on specific questions she was receiving from constituents but offered no indication that more clarification would be widely available.
Since the application and instructions for loan forgiveness were released May 15, practitioners have complained that the new guidance doesn’t resolve major issues of the program created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136).
“Guidance that deals with all the issues would probably be an impossible goal for any relatively complex program, so I would say that Secretary Mnuchin is overstating what has taken place,” Edward K. Zollars of Thomas, Zollars & Lynch Ltd. told Tax Notes.
Among the questions practitioners still have are whether an employee receiving severance pay counts in the calculation for full-time equivalency and how retirement plan expenses are determined.
Support for Covered Period Fix
The American Institute of CPAs said one lingering problem involves the Paycheck Protection Program loan’s covered period, which requires businesses to spend the loan within eight weeks for it to be forgiven.
Small businesses need more flexibility on when the eight-week period begins or the covered period should be extended, the organization said in a May 16 release.
Mnuchin agreed during the hearing and said he’d like to see a bipartisan technical fix.
“Companies are really having issues with not necessarily being able to use it during that eight weeks,” Mnuchin said. “They don’t want more money. They want flexibility.”