When considering converting a C corporation to an S corporation, tax advisers and taxpayers need to pay careful attention to the many perils that exist. Failure to pay close attention to the road in this area could result in...more
8/21/2024
/ C-Corporation ,
Capital Gains Tax ,
Corporate Conversions ,
Corporate Taxes ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Passive Activity ,
S-Corporation ,
Shareholder Distributions ,
Shareholders ,
Tax Planning
Unlike the rules contained in Subchapter K surrounding partnership distributions, which tend to be somewhat complex, the distribution rules contained in Subchapter S are fairly straightforward. Nevertheless, from time to...more
On June 28, 2024, in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overruled the landmark case of Chevron U.S.A. v. Natural Resources Defense Council, Inc. et. al. Interestingly, the Loper decision was rendered...more
7/2/2024
/ Administrative Agencies ,
Administrative Interpretation ,
Administrative Procedure Act ,
Chevron Deference ,
Judicial Authority ,
Loper Bright Enterprises v Raimondo ,
Regulatory Agencies ,
SCOTUS ,
Statutory Authority ,
Statutory Interpretation ,
U.S. Treasury
In the S corporation arena, tax advisors and taxpayers generally do not focus a lot of attention on the S corporation shareholder eligibility rules other than at the time the S election is made. As we dive into shareholder...more
As reported last week, opponents of the Washington state capital gains tax, after ultimately losing in the courts to have the legislation stricken as unconstitutional, decided to take the matter to the voters. They have...more
I have reported in several prior blog posts the significant events impacting the newly enacted Washington state capital gains tax. The turbulent ride of this legislation continues!...more
In the S corporation arena, tax advisors generally do not focus much attention on unreasonable compensation. As we delve into the issue in this Part VII of my multi-part series on Subchapter S, it will become apparent that...more
6/6/2024
/ C-Corporation ,
Compensation ,
Corporate Taxes ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Payroll Taxes ,
S-Corporation ,
Shareholders ,
Tax Deductions ,
Tax Liability ,
Tax Planning ,
Tax Rates
I am taking a break from my multi-part blog series, A Journey Through Subchapter S / A Review of the Not So Obvious & The Traps That Exist For The Unwary, to provide another update on the Corporate Transparency Act (“CTA”)....more
This sixth installment of my multi-part series on Subchapter S is focused on the revocation of an S corporation election. While the rules relating to revocation are fairly straightforward, there are a few nuances that may...more
I have been sharing knowledge with tax professionals through writing papers and articles, and presenting at tax conferences for almost 40 years. On March 11, 2013, with the encouragement of others, I entered the digital...more
This fifth installment of my multi-part series on Subchapter S is focused on married individuals who own shares of an S corporation. While the rules relating to shareholder eligibility seem straightforward, their application...more
This fourth installment of my multi-part series on Subchapter S is focused on suspended losses of an S corporation. While the rules seem straightforward, their application can be tricky, especially given legislative changes...more
I am taking a short break between the third and fourth installment of my multi-part series on Subchapter S. Before I publish the fourth installment on that topic, my colleague Steven Nofziger and I want to alert our readers...more
This third installment of my multi-part series on Subchapter S is focused on a single Code Section, namely IRC Section 1361(b)(1)(C) and the ineligibility of nonresident aliens as shareholders of Subchapter S corporations....more
This second installment of my multi-part series on Subchapter S is focused on two Code Sections, namely IRC Section 1375 and IRC Section 1362(d)(3)....more
In October 2023, I authored a new White Paper, A Journey Through Subchapter S / A Review of The Not So Obvious & The Many Traps That Exist For The Unwary. This year, in a multi-part article, I intend to take our blog...more
The Internal Revenue Service (“IRS”) announced in IR News Release 2023-247 (December 21, 2023) its new Voluntary Disclosure Program (“ERC VDP”) that allows employers who may have received questionable Employee Retention...more
As you may be aware, the Corporate Transparency Act (the “CTA”) is a new federal law that requires most U.S.-based companies, including corporations, partnerships and limited liability companies, to report information...more
6/12/2023
/ Anti-Money Laundering ,
Beneficial Owner ,
Corporate Transparency Act ,
Duty to Update ,
Exemptions ,
Filing Deadlines ,
Financial Crimes ,
FinCEN ,
Penalties ,
Reporting Requirements ,
Tax Fraud
As you may be aware, the Corporate Transparency Act (the “CTA”) is a new federal law that requires most U.S.-based companies, including corporations, partnerships and limited liability companies, to report information...more
On April 5, 2023, Commissioner Daniel I. Werfel issued the Internal Revenue Service Inflation Reduction Act Strategic Operating Plan (“Plan”). The Plan, which spans over 145 pages, is a roadmap to how the Service will deploy...more
It is a rainy day in the Pacific Northwest with chances of snow showers. For those taxpayers that reside in the state of Washington or own highly appreciated capital assets located in the state, their day just got a bit...more
3/27/2023
/ Capital Gains ,
Capital Gains Tax ,
Constitutional Challenges ,
Income Taxes ,
Popular ,
State Constitutions ,
State Taxes ,
Tax Liability ,
Tax Returns ,
WA Supreme Court ,
Washington
As I have discussed in prior blog posts (March 11, 2013, April 9, 2013 and December 9, 2013), worker classification has historically been a focus of attention of various government agencies as well as others. Misclassifying...more
By motion dated November 3, 2022, the Washington State Attorney General asked the Supreme Court of the State of Washington to allow the Washington Department of Revenue to implement and collect the capital gains tax struck...more
More than two decades ago, the Service announced its intention to consider simplifying the entity classification rules in Notice 95-14. It stated:
“The Internal Revenue Service and the Treasury Department are considering...more
11/10/2022
/ Business Entities ,
Check the Box Rules ,
Entity Classification ,
Income Taxes ,
IRS ,
Limited Liability Company (LLC) ,
Partnerships ,
S-Corporation ,
Tax Liability ,
Tax Planning ,
U.S. Treasury
On August 23, 2022, the Regular Division of the Oregon Tax Court issued its opinion in Santa Fe Natural Tobacco Co. v. Department of Revenue, State of Oregon. The court determined that the taxpayer in that case is subject to...more