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Breaking Down the False CTA Narrative

Tax Notes published a good summary of the state of play regarding the Corporate Transparency Act in last week’s edition, including highlighting the multiple lawsuits filed against the law and the several bills introduced to either delay or repeal the onerous new reporting regime. That said, a couple of items in the article caught our eye that are worth clarifying.

Compliance Costs

The article notes:

According to FinCEN estimates, businesses with simple beneficial ownership structures will spend about 90 minutes on average to fill out their paperwork and about 40 minutes to update it. Companies with more complex ownership structures could spend

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2024-06-17T20:36:26+00:00June 17, 2024|

How Much is Fair?

Yesterday’s Senate Budget Committee hearing produced an interesting exchange that caught our attention. The hearing was entitled “Making Wall Street Pay Its Fair Share,” but when it came to defining exactly what “fair” means, the supposedly expert majority witnesses dissolved into an incoherent, dissembling mob.

It all started when Senator Ron Johnson (R-WI) posed the question to the first committee witness, Sarah Anderson from the Institute for Policy Studies:

Sen. Johnson: What percentage of an American’s income should the federal government be able to extract? What’s the maximum tax rate?

Anderson: I’d be happy to give you my preferred top marginal

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2024-06-13T22:16:34+00:00June 13, 2024|

The “Experts” Get 199A Wrong, Part 2

We like Marty Sullivan. He always has something interesting to say. His latest piece criticizing Section 199A is a bit of a disappointment, however.

Where to start? Marty says the pass-through community was “seething” following the resolution of the 2012 fiscal cliff – we weren’t.  He says family businesses can just elect to be C corps if they don’t like paying higher rates – except they pay more either way (we’ve covered that one many, many times). And he says we should reject 199A because it excludes certain industries – wasn’t our idea.

But those are quibbles.

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2024-06-05T17:54:25+00:00June 5, 2024|

S-Corp Modernization Introduced in the House

Good news for the S corporation community! Ways and Means Member Brad Wenstrup (R-OH) has introduced the S Corporation Modernization Act of 2024 (H.R. 8614).  S-Corp Mod has a long history of simplifying the rules for Main Street businesses and helping the Main Street businesses be more competitive as they remain in the family.

The introduction of this year’s bill will help S-Corp move forward on a list of technical tax provisions important to the country’s 5 million S corporations, including:

  • Increasing their access to capital;
  • Expanding the list of eligible shareholders to include more employees, non-resident aliens, and retirement

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2024-06-05T14:04:22+00:00June 5, 2024|

Wait, What???

Under the category of “Care to elaborate?” this month’s CBO analysis of the fiscal cliff costs includes estimates of the Section 461(l) excess loss provision that are, shall we say, significantly revised. The new numbers are much more believable, but they do beg the question of what took the JCT so long to rework their original estimates.

To review, the TCJA capped the ability of pass-through business owners to deduct their active business losses. Under the old rules, those losses could immediately offset other forms of owner income (wages, capital gains, investment income, other business income, etc.).  This approach

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2024-05-28T20:13:26+00:00May 28, 2024|