Thanks to lobbying by NCACPA, the NC Department of Revenue has agreed to temporarily suspend all collection activities related to the addback of expenses associated with forgiven Paycheck Protection Program loans, pending the receipt and examination of a 2020 amended NC return.
NCACPA recently learned that taxpayers were receiving notices from the NCDOR assessing penalties and interest associated with the PPP expense addback for tax year 2020. The affected taxpayers had opted not to pay the additional tax, penalties, and interest associated with the addback in anticipation that state law would change. The General Assembly later eliminated the addback as part of the 2021 Appropriations Act (SB 105/S.L. 2021-180).
Taxpayers who received notices assessing tax, penalties, and interest associated with the PPP issue should contact the NCDOR to request a delay of the collections process. Cale Johnson, the Director of Taxpayer Assistance and Collections, will serve as the taxpayer contact. Johnson can be reached by phone at (919) 614-3984, or by email at [email protected].
Affected taxpayers must file an amended 2020 NC income tax return on or before March 15, 2022. Collection activities will resume on all suspended accounts after March 15, 2022.
Prior to NCACPA’s request for a suspension of collection activities, the NCDOR had been advising taxpayers who received the notice to pay the penalties and interest, then recover it once their amended return is processed. Other options included paying the interest and requesting a penalty waiver or setting up an installment agreement. None of these options were favorable.
NCACPA extends its gratitude to Rollin Groseclose, CPA, for bringing this issue to the attention of the Advocacy team. Rollin is the Vice President of Tax Services for Johnson Price Sprinkle PA, a Past Board Chair of NCACPA, and a member of the Tax Resource Group.
If you have questions about this issue or other policy matters, please contact NCACPA Director of Advocacy Robert Broome, CAE.