PPP (Payroll Protection Program) Issues: Possible Civil & Criminal Liability

The fact that many businesses were impacted due to the pandemic and the government responses to it, such as mandatory lockdowns, etc., was not lost on Congress. In the weeks and months following the start of the pandemic, various programs were implemented to help business owners pay employees who were impacted, as well as to cover ongoing deductible expenses. One of these programs, PPP, allowed for loans to be made by financial institutions through the Small Business Administration, to quickly put money into the hands of struggling employers.

The problem is that the government isn’t always clear about what the rules are, especially when they’re rushing to address an emergency, as they were with Covid-19. For example, Congress and the Internal Revenue Service had a very public dispute about whether businesses could deduct otherwise deductible expenses paid with PPP loan money that was, or was “reasonably expected to be,” forgiven. Despite letters from ranking Congressional figures, the IRS did not back down. This fight went on through the 2020 filing season. In fact, it wasn’t until later in 2021 that Congress enacted a legislative fix that the IRS was forced to accept. Subsequently, the IRS issued three different Revenue Procedures with respect to PPP Loan forgiveness.

Arizona's Preeminent Tax Attorneys Discuss Potential PPP Loan Issues

These Revenue Procedures, however, imposed requirements on businesses, some of which needed to be completed by December 31, 2021. For many businesses, still dealing with yet another wave of Covid-19 and struggling to keep the doors open, the requirements may not have hit their radar. For others, whatever their intentions when the money was being loaned or whatever they believed would happen with respect to loan forgiveness at some point, life may not have turned out as they planned, especially as the pandemic has continued.

The problem now is that the government wants accountability. This may simply mean there are civil liabilities to work out. It may require collection alternatives in those cases where employers are still struggling and don’t have the funds on hand to pay liabilities, in part or in full. Or, in some cases, it may mean something far more serious. IRS and Department of Justice investigations into PPP fraud or other CARES Act violations or abuse have ramped up significantly. And they are getting convictions. States, themselves, are also investigating, prosecuting, and convicting people.

As the preeminent tax controversy firm in Arizona, the attorneys at Silver Law are uniquely qualified to assist with any type of PPP issue. As stated in our attorney profiles, we are all former IRS Chief Counsel attorneys with dozens of years of collective experience dealing with the IRS, DOJ and United States Attorney’s Offices. We know how the government works, what it does well, and what it doesn’t. We handle audit representation, IRS Appeals, and can represent you in various civil courts. We are experienced in working out collection solutions, whether it be an installment agreement, an offer in compromise, or getting you into “currently not collectible” status to protect your business and assets. And if necessary, we are well-equipped to represent you in criminal matters, from the beginning of a criminal investigation through to resolution or trial, if need be.

If you’ve received a notice from the government, Federal or State, concerning PPP or any type of tax issue, or if you haven’t yet, but believe you might, contact us right away, so we can begin giving you the benefit of our expertise and help you minimize the impact on your financial and personal well-being.


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