"It was like shutting the water off. We went from 125 customers a day to 15," said owner Steve Novak.
This comes to the restaurant after record sales in May through mid-October, when Walsh County had worked its way back to the new normal. According to Novak, since mid-October, revenue has dropped 95%. That meant laying off five of the cafe's nine employees. It was a tough choice for Novak after those employees rallied around him last year when he battled colon and rectal cancer.
"This is as tough as it was having cancer," he said.
Novak was able to keep those employees on the payroll during the 40-day statewide shutdown earlier this year thanks to the Paycheck Protection Program to help small businesses. Through it, he received $10,000, and it even brought him national attention.
Now the IRS is telling small business owners like Novak that they have to pay taxes on that money.
"I almost had a heart attack and slight stroke," said Novak.
Tax experts say the poorly written legislation is creating nightmares for business owners and accountants. It's clear the intent was not to tax business owners, but as it stands right now that's the law.
"This is just adding fuel to the fire," said Matthew Komprood with Fritz Nelson LLC in Grand Forks.
"You will see a lot of businesses paying between 20% to 40% amount back," said Komprood.
North Dakota Sen. Kevin Cramer is helping to lead the charge in Washington to pass legislation clarifying the confusion with the IRS.
"They would be forgiven if they played by the rules and never be punished for taking the loan," explained Cramer.
Komprood is telling business owners to play it safe.
"Include it in your taxable income, and six months, a year from now, we can amend your return and get you that refund," he explained.
Novak said the PPP aid was a lifesaver back in the spring and is hopeful that this confusion will get cleared up before he has to pay up.
"You never know until the fat lady sings," he said with a laugh.
The Link LonkDecember 02, 2020 at 12:00PM
https://www.grandforksherald.com/news/government-and-politics/6784533-IRS-to-send-tax-bills-to-small-businesses-that-took-money-from-the-Payroll-Protection-Program
IRS to send tax bills to small businesses that took money from the Payroll Protection Program - Grand Forks Herald
https://news.google.com/search?q=Send&hl=en-US&gl=US&ceid=US:en
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