S-CORP Fights Proposed Tax Increases As Congress Searches for Revenue

As S-CORP members will recall, this year began with a Joint Committee on Taxation (JCT) proposal to impose a nearly 3 percent additional tax on the full distributable share of profits for S corporation shareholders. The proposed tax would raise an astonishing $57.4 billion over ten years by applying to shareholders of S corporations as well as to partnerships. Then in May, the Department of Treasury’s Inspector General for Tax Administration in testimony before the Senate Finance Committee (May 25, 2005) also endorsed the proposition that the net earnings of S corporations should be subject to payroll taxes. This was

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