The AICPA sent a letter Tuesday encouraging congressional leaders to push back the Paycheck Protection Program’s (PPP’s) March 31 application deadline at least 60 days.
The letter is the first of two efforts the AICPA is making to communicate directly with Congress about the need to delay the PPP deadline. On Wednesday morning, the AICPA’s vice president–Firm Services, Lisa Simpson, CPA, CGMA, will discuss the PPP during a hearing before the U.S. House of Representatives Committee on Small Business.
The AICPA lays out its arguments for delaying the PPP deadline in its letter addressed to House Speaker Nancy Pelosi, D-Calif., House Minority Leader Kevin McCarthy, R-Calif., Senate Majority Leader Charles Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky.
The letter, signed by AICPA President and CEO Barry Melancon, CPA, CGMA, contends that the ability of small businesses to apply in time for funding during the current round of the PPP is in jeopardy because of numerous significant system issues, operational process changes, and recent guidance released by the administration of President Joe Biden. Specifically, the letter cites the following issues:
Many first- and second-draw PPP loan applications are not being accepted into the SBA’s E-Tran system due to validation checks. CPAs supporting small business applications are reporting countless examples where false error codes tied to validation checks are delaying critical help for small businesses.
Applications successfully submitted into the E-Tran system are encountering SBA processing and resolution delays.
Administration changes intended to prioritize PPP loans for small and underserved businesses have caused confusion and inequity. The letter argues that guidance released last week allowing some self-employed individuals to use a new, more generous PPP loan calculation unfairly affects sole proprietorships that received a smaller PPP loan than they would be eligible for under the new rule.
In addition to urging a delay of the PPP application deadline by at least 60 days, the AICPA letter also calls on Congress to support a postponement of the April 15 tax filing and payment deadlines to June 15. Reasons cited included a delayed start to the 2020 filing season, the new round of PPP applications requiring practitioners to assist small business clients during tax season, changes recently made to the employee retention credit, and ongoing IRS service issues.
The letter closes by saying that moving the PPP deadline back to May 31 while also delaying the April 15 tax deadlines to June 15 would provide businesses the time to apply for PPP loans and ease workload compression issues for the accountants who support them.
Simpson will go into greater detail on the PPP processing problems and other issues during her appearance before the House Committee on Small Business. The hybrid hearing, titled “The Next Steps for the Paycheck Protection Program,” is scheduled to begin at 10 a.m. ET. More details and a livestream link are available on this webpage. You may also download a PDF of Simpson’s remarks.
AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held every other week. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register. Recordings of Town Hall events are available to view for free on AICPA TV.
The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.
Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA, CPA.com, and fintech partner Biz2Credit.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.
— Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.