"Good luck from a legal perspective arguing that someone has made a false certification when the CARES Act — the legislation that established the PPP — only says you need to certify that you need the money due to economic conditions," Nitti said.Nitti said he recently spoke with a client who was trying to decide whether to return the PPP funds. Though the calculations seemed to suggest the business was fine in the present, two major customers are running into trouble.
"So the dark times are probably ahead," Nitti said. "Why give this money back? When he took the loan, his business looked solid, but he could be in dire straits in three weeks."For now, professionals are telling small business owners to maintain detailed records detailing how they use the money and prepare for the possibility of further scrutiny.
"We've been telling people that when they get the funding, they need to go to the bank and open a separate account," said Dan Herron, CPA and principal at Elemental Wealth Advisors in San Luis Obispo, California.More from Smart Tax Planning:
Free market for small businesses, while giant corporations get socialism. I am surprised everyone doesn’t recognize that, since it’s as plain as the sky is blue
I had this crazy idea that the Payroll Protection Program was to protect payroll, ie to retain or re-hire employees so that people did not lose their source of income. katerogers what say you?