PPP Shell Company Discovery Act
The PPP Shell Company Discovery Act would broaden government access to information about Paycheck Protection Program (PPP) loan recipients for use in criminal investigations. The Secretary of the Treasury (or their delegate), after consulting with the SBA Administrator and the Pandemic Response Accountability Committee, would compile a list of PPP loan recipients that includes name, mailing address, taxpayer identification number, and the total PPP loan amount. This information would be shared with the IRS and the Department of Justice to aid enforcement against potential fraud or other wrongdoing related to PPP loans. The bill also requires the IRS to create two additional targeted lists based on payroll tax information: (1) recipients who did not deduct and withhold any tax in 2019, and (2) recipients whose PPP loans are large relative to their wages in 2019, using a defined formula. The Commissioner of the IRS would notify the Attorney General and the Treasury Secretary when these lists are complete, and the bill specifies that the information can be disclosed for criminal investigations under existing law (IRC 6103(i)(1)). In short, the act would expand cross-agency access to PPP recipient data to pursue criminal investigations, with emphasis on identifying potentially improper or fraudulent use of PPP funds.
Key Points
- 1Creation of a master PPP loan recipient list: The Treasury will compile a list of PPP loan recipients (name, address, taxpayer ID, and total loan amount) and share this data with the IRS and DOJ, after consultation with SBA and the Pandemic Response Accountability Committee.
- 2Additional IRS-generated lists: The IRS would create two separate lists based on payroll tax data:
- 3- Recipients with PPP loans who did not deduct/withhold any tax in 2019.
- 4- Recipients whose PPP loans are large relative to their wages (using a defined wage-based threshold).
- 5Notification to senior officials: The IRS Commissioner must notify the Attorney General and the Secretary of the Treasury when each of the above lists is completed.
- 6Authorized use of tax return information: The bill references existing law that governs when tax return information can be disclosed for criminal investigations (IRC 6103(i)(1)).
- 7Definitions of terms: PPP loan is defined as a loan forgiven under specific CARES Act provisions (7(a) paragraphs 36/37 or 7A). A “PPP loan recipient” means someone on the Treasury’s PPP recipient list.