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Washington Wire

Section 199A Deduction Needed to Provide Pass-Throughs Tax Parity with C Corporations

March 18th, 2019|

A new presentation on the Section 199A deduction from the Joint Committee on Taxation has gotten people’s attention, particularly this slide: The slide prompted Senator Ron Wyden, the Ranking Member on the Senate Finance Committee, to observe, "These are not the struggling small business owners we were told this provision would benefit." The Ranking Member’s response is misdirected, however.  The 199A deduction was not an effort to reduce taxes on small businesses, but rather an attempt ...

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The Legal Case for Pass-Through SALT Parity

March 14th, 2019|

Last week, Bloomberg published a report that got our attention.  Entitled, “IRS May Knock down New York, Connecticut SALT Workarounds,” the article says the IRS is “likely” to issue regulations that invalidate SALT workarounds. The reference to New York didn’t surprise us.  It’s no secret the IRS is targeting the charitable workaround adopted by New York and other states – they already issued guidance last fall throwing sand in the gears of that one.  But the ...

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S-Corp Submits Comments Defending Manufacturers

February 26th, 2019|

Today, the S Corporation Association submitted its formal comments to the IRS on the pending Section 163(j) rules.  Section 163(j) would impose the new, 30 percent cap on interest deductions as part of the Tax Cuts and Jobs Act (TCJA). Under the TCJA, Congress intended to impose a higher cap to start, and then lower the cap in the future, giving affected companies time to prepare for the new policy.  But the rules proposed by the ...

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199A Pass-Through Deduction Rules Finalized

January 30th, 2019|

Treasury issued the final rules on 199A earlier this month.  You can read the rules and accompanying guidance here: 199A Final Rule Revenue Procedure 2019-11 Notice 2019-07 You can also read a terrific “how does it all work” review published in Forbes the other day.  As the writer notes: I believe in giving credit where credit is due, and I'll be damned if the IRS doesn't deserve some serious credit. It was less than 13 months ...

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S-Corp Testifies on 199A

October 18th, 2018|

Board Member and Advisory Committee Chair Tom Nichols represented S-Corp in Tuesday’s IRS hearing on Section 199A. Tom was one of 26 witnesses to testify.  As Tax Notes summarized: Thomas J. Nichols of Meissner, Tierney, Fisher & Nichols SC said when taxpayers have losses from one trade or business and income from another, they are required to aggregate those amounts to determine the deduction amount, even though aggregation isn’t mandated when determining whether Form W-2 ...

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