Uncategorized - The S Corporation Association

S-Corp Submits 385 Comments

The debate over Section 385 continues. The comment period ends today, and we sent in our comment letter along with the rest of the business community.

As we noted in our submission, the 385 regulations were advertised as a response to base erosion practices, but the rule itself is not limited to international transactions. Nor is it limited to businesses of a certain size. Instead, it targets the related party debt of domestic businesses of all sizes. As our comments state:

Since their release, the broader business community has raised numerous concerns regarding scope of the Proposed Regulations, including the statutory authority …

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admin2019-02-01T19:56:24+00:00July 7, 2016|

House Tax Blueprint

You have to feel for the House tax writers. They spent months putting together a plan to reform the tax code and now all anybody wants to talk about is Brexit and Section 385. That’s too bad, because the plan outline released last week is pretty good.

You can read the whole outline here, plus there’s been lots of discussion among the tax experts on how it would help to simplify tax collections while encouraging more business investment and job creation:

Tax Foundation: “Details of the House GOP Tax Plan”
Tax Policy Center: “Ryan Proposes Big Tax Cuts …

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admin2019-02-01T19:56:24+00:00June 28, 2016|

More on 385

S-Corp continues its efforts to educate policymakers about the pending Section 385 rules and the harm they will cause to domestic employers and American jobs starting…well, now.

That’s the dirty little secret about the 385 rules. Released as part of a package of “anti-inversion and base erosion” tools, much of their impact will be on normal domestic business practices instead. All that is necessary to be subject to the rule is 1) a group of investors that controls two or more corporations and 2) a loan or cash pooling between members of the group.

That’s it. No international component required. And the …

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admin2019-02-01T19:56:24+00:00June 23, 2016|

S-Corp on Section 385

The S Corporation Association has sent a letter to the two congressional tax committees asking them to support efforts to pull Treasury’s proposed section 385 regulations released back on April 4^th. The comment period for these regs doesn’t close until July 7^th, and we intend to submit lengthy comments outlining our numerous concerns with the regulations and how they will hurt Main Street businesses.

But in the meantime, we believe it is important for policymakers to have a better sense of just how far these regulations extend and the costs they will impose on businesses of all stripes operating in …

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admin2019-02-01T19:56:24+00:00May 25, 2016|

Senate Finance Hearing on Corporate Integration

Remember the pass-through mantra for tax reform? All business income should be taxed once, it should be taxed at the same top rate, and then we should leave it alone! Well, that mantra was on display Tuesday when a panel of tax experts explored the benefits and costs of corporate integration. Here’s Dr. Michael Graetz:

“In the 1990s, principally because of its administrative advantages, the Treasury Department recommended taxing business income once—at the business level. This form of integration was advanced by President George W. Bush in 2003, but Congress instead simply lowered shareholders’ income tax rates on dividends. That …

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admin2019-02-01T19:56:24+00:00May 19, 2016|