The Washington Wire - The S Corporation Association

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 …

(Read More)

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|

Defending 199A in Tax Notes

Tax Notes ran a letter to the editor this week penned by S-Corp President Brian Reardon. It responds to a recent critique of the Section 199A deduction and serves as a useful “cheat sheet” in rebutting the various claims we’ve seen over the years.

The first is that extending 199A will add to the deficit. As the piece points out:

The deduction was packaged with numerous tax hikes — the state and local tax cap, the excess loss limitation, the interest deduction cap, and others — that target upper-income business owners. Many of these pay-fors stay in the tax code …

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admin2024-06-25T14:28:38+00:00June 25, 2024|

Talking Taxes in a Truck Episode 38: Helping Students Read Better

Our latest podcast guest is Marc Matsoff, President of Read Naturally, a Minnesota-based company that helps developing readers of all ages.

Marc discusses the company’s fascinating history and how the S corporation structure has helped it stay in the family for three generations, as well as the various tax challenges they currently face – from the looming expiration of Section 199A to their inability to deduct their R&E tax regime.

This episode of Talking Taxes in a Truck was recorded on June 20, 2024, and runs 29 minutes long.

admin2024-06-22T14:46:35+00:00June 22, 2024|