admin, Author at The S Corporation Association

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

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 to maintain tax parity for pass-through businesses of all sizes. Without 199A, Main Street businesses would face sharply higher tax rates than the C corporations ...

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Section 199A Deduction Needed to Provide Pass-Throughs Tax Parity with C Corporationsadmin2019-03-18T12:53:39+00:00

The Legal Case for Pass-Through SALT Parity

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 pass-through SALT parity bills passed by Connecticut and Wisconsin are entirely different, both legally and politically. Why can C corporations deduct all their SALT while ...

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The Legal Case for Pass-Through SALT Parityadmin2019-03-14T16:58:06+00:00

S-Corp Submits Comments Defending Manufacturers

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 IRS would inexplicably apply the lower, more onerous cap to manufacturers immediately! This is definitely not what Congress intended and will come as an unwelcome ...

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S-Corp Submits Comments Defending Manufacturersadmin2019-03-05T14:37:24+00:00

199A Pass-Through Deduction Rules Finalized

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 ago that Congress dumped 500 pages of sloppy statutory language on the Service in the form of the Tax Cuts and Jobs Act, and somehow, ...

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199A Pass-Through Deduction Rules Finalizedadmin2019-02-06T18:49:35+00:00

S-Corp Testifies on 199A

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 wages and basis in property can be combined. Instead, taxpayers must jump through several hoops to determine if they can aggregate those businesses, Nichols added. ...

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S-Corp Testifies on 199Aadmin2019-02-06T18:49:35+00:00