IRS Announces Lenders Should Not File Form 1099-C for Forgiven PPP Loans

September 23, 2020

The IRS recently published Announcement 2020-12 notifying lenders they should not file cancellation-of-debt information returns or furnish payee statements under Sec. 6050P of the Internal Revenue Code to report the amount of qualifying forgiveness of covered Paycheck Protection Program (PPP) loans.

Sec. 6050P generally requires a lender that discharges at least $600 of a borrower’s indebtedness to file a Form 1099-C with the IRS and furnish a payee statement to the borrower. The IRS states that the filing of these information returns regarding qualifying forgiveness of PPP loans could result in the issuance of underreporter notices (IRS Letter CP2000) to eligible recipients.

To read the full Announcement 2020-12, visit the IRS website.