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IRS Probing $100 Billion In Potential COVID-19 Loan Fraud

Authored by Naveen Athrappully via The Epoch Times,

Roughly $100 billion in loans given for COVID-19 programs have been identified as suspected fraud by tax authorities.

Earlier this year, the Small Business Administration (SBA) referred more than $200 billion in suspected COVID loan fraud to the IRS.

The tax agency then compared the information that the borrowers submitted to the SBA when applying for the loans with the information they declared to the IRS.

Analysis identified discrepancies associated with approximately $100 billion in loans, the SBA said in a Sept. 23 statement.

The IRS will determine whether additional taxes and penalties apply, including penalties for committing fraud, according to the SBA.

The suspected fraud pertains to the Paycheck Protection Program (PPP) and COVID Economic Injury Disaster Loan (EIDL) initiatives.

PPP was aimed at helping businesses keep their workforce during the pandemic, while EIDL provided loans and advances to help businesses recover from the economic impacts of the crisis.

In 2023, the SBA judged that 20 percent of the $1.2 trillion pandemic relief program could have been obtained by fraud.

SBA Administrator Kelly Loeffler said:

"The IRS's identification of approximately $100 billion in suspected tax fraud sends a clear message: fraudsters who stole from SBA's COVID-relief programs will ... face accountability at the SBA.

"If they inflated payroll, fabricated employee counts, falsified business records, or otherwise lied to obtain taxpayer-funded loans, they will also face scrutiny from the IRS."

The federal government is estimated to lose $233 billion to $521 billion annually to fraud, the Government Accountability Office said in an April 2024 report.

Tackling COVID Fraud

The Trump administration has taken several steps to crack down on COVID-19 loan fraud.

In an April 24 statement, the SBA said it had referred 562,000 suspect loans to the Department of the Treasury for collection. These were PPP and COVID EIDL loans.

The SBA is legally obligated to refer delinquent debts to a Treasury bureau when they are deemed to be sufficiently past due.

However, under the prior administration, the SBA failed to refer the 562,000 loans to authorities for investigation and collection, the statement said.

On Sept. 14, task force head Vice President JD Vance announced that the administration would permanently suspend 870,000 people from receiving any more federal loans, as they are suspected of having defrauded $39 billion from COVID-19 small business programs.

Tyler Durden Sat, 09/26/2026 - 17:30

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