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IRS Considering More S Corp Guidance

The 2004 American Jobs Creation Act contained numerous S Corp friendly provisions, including increasing the number of allowable S Corp shareholders from 75 to 100 and expanding the definition of a single shareholder to include large families.

According to BNA, the IRS is actively considering issuing additional guidance for some of the provisions (Sections 231 through 240 of the bill), including additional guidance on Section 231 of the Act, which defines which members of a family may be treated as a single S corporation shareholder. This additional guidance was part of the IRS’s business plan for 2005/2006 business year, which ends …

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2019-02-06T18:47:20+00:00April 20, 2006|

S-CORP and Congressional Small Business Advocates Continue Push for b�Sting Taxb� Relief

Congress has returned from a weeklong recess and once again will attempt to finish last year’s tax business: a $70 billion tax cut bill (the “reconciliation” bill) and a pension reform bill. The S Corporation Association (“S-CORP”) continues to work with congressional tax-writers to include a Senate-passed provision to provide “sting tax” relief for S corporations subject to double taxation at the highest corporate rate in the tax reconciliation bill. S-CORP salutes Senator Blanche Lincoln (D-AR) for leading a bicameral and bipartisan letter that was sent last night to the House and Senate conferees.

The letter urges House and Senate conferees …

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2019-02-06T18:47:20+00:00March 28, 2006|

New Congressional Budget Doesn’t Protect Tax Relief

There are two ways to pass a tax bill in the Senate: bring it up under the regular floor rules and gain the support of 60 Senators, or bring it up under the “budget reconciliation” process and attain the support of a simple majority. The budget offered by Senate Budget Chair Judd Gregg last week assumes $227 billion in lower taxes over the next five years, but doesn’t protect that tax relief under reconciliation.

What does that mean for S-CORP members?

It means that any tax bill brought to the Senate floor that conforms to the budget resolution would still …

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2019-02-06T18:47:20+00:00March 14, 2006|

Congressional Efforts to Close Tax Gap Means S Corp Payroll Tax Increase Is Still A Threat

Today the Senate Budget Committee held a hearing on “the causes of and solutions for addressing the federal tax gap.” Witnesses included IRS Commissioner Mark Everson, Government Accountability Office Comptroller General David Walker, and Nina Olson, National Taxpayer Advocate. The tax gap is the difference between what taxpayers owe and what they pay (or at least, what they pay on a timely basis).

This hearing stems from the release of the President’s FY07 budget (which makes funding recommendations for the IRS and includes other proposals to improve disclosure and tax administration) and the IRS’ announcement yesterday that the 2001 tax gap …

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2019-02-06T18:48:17+00:00February 15, 2006|

The President’s Budget

One of the challenges of political advocacy is to separate real from imagined threats. For S Corps, the threat of increasing payroll taxes on S Corp profits continues to be very real indeed, despite the best efforts of a broad coalition of business groups to educate policy makers on why the proposals on the table are bad policy and bad economics. For example, the attached BNA story is about a relatively narrow proposal in the President’s new budget to increase collections of payroll taxes from companies that lease employees to other businesses.

At first blush, it’s not really about S Corps. …

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2019-02-06T18:48:17+00:00February 10, 2006|
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