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The top Republican and Democrat on the Senate Finance Committee said the Treasury Department "missed the mark" in new guidance that limits tax breaks for businesses that get their Paycheck Protection Program loans forgiven.

In a joint statement Thursday, Senate Finance Chairman Chuck Grassley and Democrat Ron Wyden said the Treasury Department is depriving some small businesses of much-needed relief by forcing them to choose between getting their Paycheck Protection Program loans forgiven or claiming write-offs on expenses they covered with the loan money. The Internal Revenue Service published guidance on the issue Wednesday.

The congressional reaction to the guidance puts additional pressure on the Treasury Department and IRS to allow taxpayers to claim the expense deductions. Grassley and Wyden encouraged the IRS to reverse its position.

The lawmakers said they are working to include language in year-end legislation clarifying that taxpayers qualify for expense deductions even if their loans are forgiven.

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