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CARES Act and Paycheck Protection Program


The Coronavirus Aid, Relief, and Economic Security (CARES) Act and Paycheck Protection Program have provided necessary economic stimulus to help businesses and individuals weather the pandemic. The Economic Aid Act further expanded on this by authorizing funding for new and additional PPP loans and other support for individuals and businesses. While these aid packages have provided much-needed support, they also have created new risks and uncertainty for those who elect to make use of the available benefits. Borrowers who receive PPP loans from the Small Business Administration (SBA) are subject to audit and investigation by the Special Inspector General (SIG) for Pandemic Recovery in the U.S. Department of the Treasury. The SIG also has the authority to refer cases to the Department of Justice for civil and/or criminal proceedings. All borrowers who accepted loans of $2 million or more are automatically subject to an audit.

Our SBA Lending Team can provide adaptive, thorough, and attentive guidance to businesses and individuals subject to audits, investigations, and legal proceedings related to the PPP and the CARES Act. Our team takes a multidisciplinary approach and is staffed by attorneys in multiple specialties, including, but not limited to, litigation, SBA lending, banking regulations, and tax, to bring a coordinated approach to counsel you through the complex and ever-changing framework of laws, regulations, and SBA guidance. We advise clients on pre-audit and pre-investigation preparations to develop defenses and document necessity in the event an audit or investigation happens. We also counsel clients on business opportunities within and in compliance with the CARES Act and related IRS rules and regulations, including significant tax benefits to businesses and individuals such as Employee Retention Tax Credits and Federal Payroll Tax Deferrals. If an audit, investigation, or proceeding against you or your business begins, we will help design the specific legal strategies necessary to protect you and your business.


In addition to audits, investigations, and other legal proceedings by the SBA and Department of Justice, the Federal False Claims Act allows for private individuals to bring legal proceedings against borrowers in the name of the federal government. If successful, these private individuals may be able to recover substantial damages from you or your business. Our SBA Lending Team has significant experience efficiently and successfully defending clients in qui tam actions brought under the False Claims Act.

Contact one of our CARES Act Attorneys today.

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Explore Further: Related News

March 19, 2021
Recently the Kentucky General Assembly approved, and Governor Beshear signed, a bill that will for Kentucky income tax purposes, (i) allow taxpayers to deduct the expenses that were paid with such forgiven Paycheck Protection Program (PPP) loans, and (ii) confirms that forgiveness of PPP loans does not create taxable income for state income tax purposes. […]
February 26, 2021
On February 22, 2021, President Biden announced several updates to the Small Business Administration’s (“SBA”) coronavirus relief programs designed to assist participation in the Paycheck Protection Program (“PPP”) for the smallest of small businesses. Specifically, the Biden Administration introduced the following five changes: A 14-day period, beginning on February 24, 2021, during which only businesses […]
June 18, 2020
Since its adoption, our firm has been tracking the Paycheck Protection Program (PPP) and its numerous modifications and limitations. We wish we could tell you that everything is now settled, and everything expected of borrowers who are going to be seeking loan forgiveness is resolved. Doing so would, however, result in the classic retort “Liar, […]