The Washington Wire Archive - The S Corporation Association

CTA Delay Gets Renewed Focus in Senate

The Main Street business community came out in force today calling on Congress to adopt a one-year delay of the Corporate Transparency Act as part of this year’s National Defense Authorization Act. The effort, led by the Main Street Employer’s coalition and backed by more than 135 of its trade association allies, is in support of a pair of NDAA amendments. As the letter explains:

Amendments sponsored by Senators Tim Scott (#2169) and James Lankford (#2831) would provide the business community and federal regulators additional time to educate millions of small business owners regarding the CTA’s new reporting requirements and …

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admin2024-07-25T17:26:53+00:00July 25, 2024|

The “Experts” Get 199A Wrong (Part 3)

A recent Twitter thread caught our eye. S-Corp typically avoids these Twitter feuds, but this is an important topic that deserves some clarity. Here’s the thread in question:

So Pomerleau thinks 199A is unnecessary while S-Corp and our Main Street Employers Coalition have long maintained that 199A is necessary for rate parity. Who is right?

Effective Statutory Tax Rates

Looking at Pomerleau’s paper, he uses three measures to examine the parity question – Effective Statutory Rates, Marginal Effective Tax Rates, and Average Marginal Effective Tax Rates. For the first, here’s his table:

…

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admin2024-07-23T19:46:27+00:00July 23, 2024|

CTA Update | July 16, 2024

Notable Developments

Appeals court sets hearing date
Yellen grilled by House lawmakers
New FinCEN guidance expands CTA’s reach

Legal Update

The Eleventh Circuit Court of Appeals announced a hearing in NSBA v Yellen, the case challenging the constitutionality of the CTA, will take place on September 27. While the court is working under an expedited timeline, that date is just three months ahead of the year-end filing deadline for existing entities.

To recap our latest alert, the total number of pending CTA challenges is currently at six nationwide:

Massachusetts: BECMA et al v Yellen (5/29/2024)
Texas: NFIB et al …

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admin2024-07-16T20:17:03+00:00July 16, 2024|

Tax Teams and Section 199A

A couple of quick updates on the Ways & Means “Tax Team” front. First, the Main Street Employers Coalition today submitted comments making the case for a permanent Section 199A pass-through deduction.

The letter is addressed to the Main Street Tax Team, one of ten teams organized by Ways & Means Chairman Jason Smith to identify solutions to the 2025 fiscal cliff, and it covers the various key aspects of the 199A debate – why the provision is important, how Congress should define parity, why can’t family businesses just convert, etc. As the letter notes:

The Main Street Employers Coalition (MSEC) …

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admin2024-07-11T13:35:44+00:00July 11, 2024|

Elusive Tax Cheats

More evidence the campaign to target high-income taxpayers with more audits isn’t going too well. A new report by the Inspector General for Tax Administration at the Treasury Department (TIGTA) suggests the expanded audits are failing to raise the promised revenue. Here’s the WSJ’s take:

Unlike bank robbers, IRS auditors tend to look where the money isn’t. That’s what happened after the agency started scrutinizing more tax returns from the wealthiest Americans. A new report says increased targeting of these taxpayers was hugely ineffective.

The policy, launched in 2020 by former Treasury Secretary Steven Mnuchin, required the IRS to audit …

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admin2024-07-09T12:27:32+00:00July 9, 2024|