Armed with nothing more than the better policy argument, team S-CORP successfully rallied business groups and our friends on the Hill to defeat a proposed $9 billion payroll tax hike on S corporations last week.

The proposal, included in a larger package of so-called tax extenders, would have applied payroll taxes to all the income of service-oriented S corporations if they met a couple of tests. As your S-CORP allies observed, the new tests envisioned were more complicated and less enforceable than current law, meaning we would have taken a step backward had Congress enacted them.

The biggest ally we had in …

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