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Washington Wire

S-Corp Comments on Section 4960 Excise Tax

May 29th, 2019|

The S Corporation Association sent comments to the Department of Treasury today raising concerns that recent guidance it published has the potential to impose the new, Section 4960 excise tax onto private operating companies. The tax is supposed to be targeted at big non-profits and universities that pay their executives and coaches salaries in excess of $1 million per year, but due to expansive definitions of “employee” and “related organization” included in the department’s guidance ...

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Tax Foundation Needs to Fix Their Map

May 22nd, 2019|

The Tax Foundation has updated some of their data on pass-through businesses last week, including this nice map with state-by-state data on the percentage of jobs from pass-throughs, which is helpful.  As before, it shows that pass-through businesses employ the majority of private sector workers in every state of the country, including seven out of ten workers in Montana! On the other hand, this map purporting to show the marginal rates paid by pass-through businesses ...

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Business Community Rallies around 199A Permanence Bill

April 11th, 2019|

More than 100 business groups came out in support today of new legislation to make permanent the 20-percent pass-through deduction. Introduced by Senator Steve Daines (MT), the "Main Street Certainty Act of 2019" -- S. 1149 -- is the companion bill to H.R. 216, bipartisan legislation introduced by Representatives Jason Smith (MO) and Henry Cuellar (TX) in the House of Representatives. The new, 20-percent deduction was a key part of the big tax reform bill ...

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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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