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Kevin O'Leary, a prominent investor and entrepreneur on Shark Tank, has drawn attention to a provision in new legislation that allows the IRS to audit small businesses that received Paycheck Protection Program (PPP) loans or Employee Retention Credit (ERC) funds for up to nine years. In a clip from a recent interview on News Nation posted on his Instagram on May 20, 2025, he stated,
"If you took ERC or PPP, remember that, the key small businesses alive, they want the IRS to be empowered for up to nine years to audit you."
He highlighted his concerns about the extended audit period’s impact on small businesses that relied on pandemic relief programs. He outlined the specifics of the audit extension, its potential effects on businesses, and ongoing efforts to address the clause.
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IRS audit extension draws warning from Shark Tank's Kevin O'Leary
Details of the nine-year audit provision
The legislation includes a clause expanding the IRS’s audit period for businesses that accessed PPP or ERC funding from the standard three years to nine years. Kevin O’Leary first identified this clause and discussed it during a News Nation interview.
"There’s an attribute in there that I discovered that’s really freaking me out, is to extend audit periods on small businesses for nine years," he said.
The expanded audit window would grant the IRS additional time to review pandemic-related financial records. In his Instagram caption, O’Leary wrote,
"I just found a hidden clause in the new “big beautiful bill” that should alarm every small business owner in America."
The Shark Tank investor explained that the provision gives the IRS extended authority, increasing regulatory scrutiny on businesses that took advantage of pandemic relief programs.
Implications for business lending and growth
Kevin O’Leary explained concerns about how the extended audit risk may influence business operations and access to capital.
"Who is going to lend you any money with that uncertainty? How would you merge to get bigger? How would you raise any capital from anybody if you knew the IRS could bring a hammer down for nine years on you?"
The Shark Tank investor underscored the possible effects on lending, mergers, and investment. In his Instagram caption, O’Leary noted,
"Who’s going to lend you money or invest with that kind of risk hanging over your head?"
The prolonged audit period may introduce financial uncertainty that lenders and investors consider a significant risk. He explained that this could hinder the ability of small businesses to secure loans or attract the investment needed for growth.
Legislative reaction and proposed changes
Following his discovery of the clause, O’Leary has advocated for its removal.
"I don’t know how that got in there, but obviously we’re going to try and get that out because it might…" he stated during his interview.
Additionally, his Instagram caption read,
"This isn’t about politics. It’s a direct hit on the small businesses that kept people employed during the pandemic. I’ve already raised the alarm on the Hill. This needs to be removed immediately."
The Shark Tank investor reflected an active push to modify the legislation and remove the extended audit provision to lessen regulatory burdens on small businesses.
Catch Shark Tank Fridays at 8 pm ET on ABC, with streaming available the next day on Hulu.
