Tax Policy

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S-Corp Comments on Section 4960 Excise Tax

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 (Notice 2019-09), the tax could be paid by many family businesses with related foundations and other charities instead. Worse, the new law is written in ...

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S-Corp Comments on Section 4960 Excise Tax2019-05-29T14:58:59+00:00

Tax Foundation Needs to Fix Their Map

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 by state appears to illustrate only a small subset of pass-through businesses, and those towards the bottom end of the possible marginal rate range to ...

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Tax Foundation Needs to Fix Their Map2019-05-22T16:21:50+00:00

Business Community Rallies around 199A Permanence Bill

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 enacted back in 2017. The deduction was designed to balance out the tax treatment of pass-through businesses with the lower, 21-percent tax rate paid by ...

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Business Community Rallies around 199A Permanence Bill2019-05-29T21:38:51+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 Finalized2019-02-06T18:49:35+00:00

Treasury Hits Family Businesses!

The verdict is in, and Treasury’s proposed rules on estate tax valuations of family-owned businesses are broad – very broad indeed. They are, simply put, a direct assault on America’s family-owned businesses. Here’s the take of WealthManagement.Com: Although the details are significant, the bottom line is that the proposed regulations would appear to eliminate almost all minority (lack of control) discounts for closely held entity interests, including active businesses owned by a family. To accomplish that, restrictions under the governing documents and even those under state law would be disregarded for valuation purposes. And Steve Leimberg's Estate Planning Email Newsletter: ...

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Treasury Hits Family Businesses!2019-02-01T19:56:24+00:00