tax gap - The S Corporation Association

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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admin2019-02-06T18:48:17+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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admin2019-02-06T18:48:17+00:00February 10, 2006|

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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admin2019-02-06T18:48:18+00:00October 12, 2005|

INCREASED S CORP SCRUTINY

INCREASED S CORP SCRUTINY — JULY 28TH, THE HILL

Yesterday’s “The Hill” takes a look at the two challenges facing the S Corp community today- by modernizing S Corp rules to ensure S Corporations continue to thrive, and blocking misguided proposals to apply payroll taxes to all S Corporation income, regardless if that income is due to capital investment or even distributed to shareholders. Full article is attached below.

IRS FOCUSED ON S CORPS: JULY 27th, WALL STREET JOURNAL

Wednesday saw another story in the Wall Street Journal on the IRS’s plan to conduct special audits of 5,000 S Corps over the next …

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admin2019-02-06T18:48:18+00:00July 29, 2005|

IRS TARGETS S CORPS!

As a follow-up to its broader “Tax Gap” study completed earlier this year, the IRS yesterday announced it will engage in a multi-year study of about 5000 taxpayers reporting S corporation income or losses. According to the IRS release (see below), the study “will be used to more accurately gauge the extent to which the income, deductions and credits from S corporations are properly reported on returns filed by the flow through corporations and their shareholders.”

The S Corporation Alliance strongly supports appropriate IRS administration of the tax code, but numerous questions arise from the IRS’s announcement, including why the IRS …

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admin2019-02-06T18:48:18+00:00July 26, 2005|