On September 21, 2022, the Internal Revenue Service (“IRS”) Chief Counsel’s Office issued an Advice Memorandum confirming that improperly forgiven Paycheck Protection Program (“PPP”) loans are taxable. Thus, even if PPP loan forgiveness was obtained, the exclusion from income tax is inapplicable if the loan recipient was not an eligible recipient. For Internal Revenue Code (“IRC”) Section 501 ( c )(7) social clubs which received PPP loans, even if such loans have been forgiven, such amounts may be considered unrelated business income (“UBI”).
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