Does anyone get an opinion letter to resolve Paycheck Protection Program uncertainties?

[Peter Gulia]

In recent weeks, we’ve seen many BenefitsLink discussions about ambiguities and uncertainties in what the Paycheck Protection Program pays for.

 

In other contexts, a businessperson might get a written opinion to show that what one did, if later found to be incorrect, relied on a reasonable interpretation.  Applied for this context, one might seek a law firm’s or accounting firm’s written opinion that a borrower’s use of PPP assistance is a reasonable interpretation of the borrower’s documents and the guidance the government had published.

 

Is anyone doing this? 

[CuseFan]

Peter, that is a great idea and something we've suggested but I have not yet heard of anyone asking for and getting a professional opinion letter from their accountant or attorney. I expect any such letter would be caveated from here to Wuhan, limiting any usefulness to a demonstration of good faith if needed in the wake of an adverse governmental interpretation.

[Peter Gulia]

CuseFan, thank you.

 

A showing of reasonable good faith is what the written advice is for.

(It’s somewhat similar to how reliance on a tax lawyer’s opinion can excuse a taxpayer from an add-on penalty, but not the underlying tax.)

 

Every written advice about law is limited to sources the advisor could have read before she finished her work.  But would a writing need a caveat beyond that one?

[Larry Starr]

8 hours ago, Peter Gulia said:

In recent weeks, we’ve seen many BenefitsLink discussions about ambiguities and uncertainties in what the Paycheck Protection Program pays for.

 

In other contexts, a businessperson might get a written opinion to show that what one did, if later found to be incorrect, relied on a reasonable interpretation.  Applied for this context, one might seek a law firm’s or accounting firm’s written opinion that a borrower’s use of PPP assistance is a reasonable interpretation of the borrower’s documents and the guidance the government had published.

 

Is anyone doing this? 

No, and I frankly don't think it accomplishes anything.  If they made a mistake with the PPP amount, they will have to pay it back. No opinion letter is going to change that.  And no one is going to jail.  The real question is what do they think such a letter will do for them?  I suggest it won't do anything for them but drain their bank account.

[Peter Gulia]

Larry Starr, thank you for your further observation.

For some, it would not drain the client's bank account; some lawyers will do the research, interpretation, and written advice without fee.

[Larry Starr]

8 minutes ago, Peter Gulia said:

Larry Starr, thank you for your further observation.

For some, it would not drain the client's bank account; some lawyers will do the research, interpretation, and written advice without fee.

Really?  Will they accept referrals???? That is, before they go bankrupt! ?

[Mike Preston]

1 hour ago, Larry Starr said:

No, and I frankly don't think it accomplishes anything.  If they made a mistake with the PPP amount, they will have to pay it back. No opinion letter is going to change that.  And no one is going to jail.  The real question is what do they think such a letter will do for them?  I suggest it won't do anything for them but drain their bank account.

I've seen it in unusual circumstances: 1) the plan sponsor has some sort of covenant that is predicated on the plan sponsor having agreed to not take any position on their tax return on the wrong side of reasonable.  Such a letter fulfills the plan sponsor's responsibility to the covenant. 2) the plan sponsor fancies themselves as "belt and suspender" folks when it comes to compliance.  You and I can say that there is no practical advantage, but this kind of client sleeps better with such a letter.