News & Analysis as of

Federal Contractors Be Aware: Rule on Tax Delinquencies and Felony Convictions Finalized

The U.S. government finalized on Sept. 30, 2016, regulations amending the Federal Acquisition Regulation (FAR) that will affect an estimated 350,000 federal contractors. These new regulations were promulgated as a result of...more

Court-Appointed “Tiebreakers” In a 50/50 Ownership Setting

When two people start a company, neither wants to give control to the other, so ownership is usually split 50/50. This sounds like a great idea at the outset, when everyone is on the same page, and there is usually no other...more

New Federal Contracting Requirements for Reporting Tax Liabilities and Felony Convictions

Federal acquisition officials recently finalized an interim rule intended to remove contractors with federal tax liabilities and felony convictions from the federal contracting arena. The interim rule, which took effect...more

Tax Tribunal Strikes Down Limitation on Credit for Taxes Paid to Other States

Readers may recall that Alabama Act 2012-427 permitted Alabama residents that owned interests in multistate pass-through entities (e.g., LLCs, partnerships, and S corporations) to claim a credit against their Alabama income...more

The Qualified Subchapter S Subsidiary Election – A Primer and Beyond

Mr. Brant’s article offers readers a broad overview of the QSub election and a review of the history surrounding its statutory creation. In addition, it provides a rather in-depth discussion of the QSub qualification...more

Qualified Small Business Stock

Entrepreneurs and angel investors often ask whether an investment in a particular start-up will qualify as “qualified small business stock” for purposes of Section 1202 of the Internal Revenue Code (the “IRC”). ...more

Did You Know That Payroll Taxes Non-Compliance Can Get You Into TROUBLE?

S Corps are corporate entities through which the income and or losses of the entity pass through to its owner’s personal income tax return. It is estimated that 100% of the shares of approximately 70% of small businesses...more

Be Careful with Living Trusts that Own S Corporation Stock

In many states, Living Trusts are a person’s key estate planning document. Living Trusts are created to hold assets during life and then dispose of those assets at death according to the person’s directions (here, we will...more

Is an S Election for an LLC Smart Planning or a Bad Idea?

By default, a limited liability company (“LLC”) with two or more members is taxed as a partnership. It also is possible to elect to treat an LLC as an S corporation for income tax purposes. But is it a good idea? And if an S...more

IRS and Treasury Issue Regulations on “50(d) Income” Affecting Tax Credit Deals

The Internal Revenue Service and Department of Treasury recently issued final and temporary regulations on income inclusion under Section 50(d) of the Internal Revenue Code as it relates to the tax credit industry. The...more

Measure 97 (Formerly Known as Initiative Petition 28) Will Be Presented to Oregon Voters on November 8, 2016: What You Need to...

C Corporations with Oregon annual revenues greater than $25 million may face a new minimum tax obligation – 2.5 percent of the excess – if Measure 97 passes. If a business falls within this category, there may be ways to...more

Duty of Consistency Doctrine - Effective Sword for the IRS, but Not Likely a Shield for Taxpayers - Tax Update Volume 2016, Issue...

Two recent cases illustrate the IRS’ ability to successfully argue that taxpayers should not benefit from their own mistakes if they result in less tax being paid. Two recent cases highlight the most current view of the...more

Valuation Discounts for Transfers of Interests in Family Entities May Be Severely Curtailed – You May Want To Act Now

On August 2, 2016, the Treasury Department and the Internal Revenue Service (the "IRS") issued proposed regulations under section 2704 (the "Proposed Regulations") of the Internal Revenue Code of 1986, as amended (the...more

IRS Issues Section 50(d) Guidance

On July 22, 2016, the United States Department of Treasury (Treasury Department) and the Internal Revenue Service (IRS) issued temporary Treasury Regulations (Temporary Regulations) related to the income inclusion rules under...more

The Cost of Clarity: IRS Issues Regulations Addressing Proper Treatment of Code Section 50(d) Income

On July 21, 2016, the IRS issued long-awaited regulations under Section 50 of the Internal Revenue Code (the “Code”) clarifying the manner in which “Section 50(d) Income” is to be recognized in lease pass-through investment...more

IRS Issues Proposed Rules on Income Inclusion under Section 50(d)(5)

The IRS just published long-awaited temporary regulations under section 1.50-1T governing the section 50(d)(5) income inclusion rules. These rules apply to lessees of investment credit property when the lessor elects to treat...more

New Temporary Regulations Deny Basis Increase in Partnership Interests in Lease Passthrough ITC Structures

On July 21, the U.S. Treasury Department (“Treasury”) released temporary and proposed regulations denying a basis increase to equity holders of lessee partnerships and S corporations to account for mandatory income inclusions...more

Reasonable Compensation Issues Remain On the IRS Radar Part II: S-Corporation Concerns

Our May 26, 2016 article, Reasonable Compensation Issues Remain on the IRS Radar ("Part I"), discussed how the IRS scrutinizes the reasonableness of compensation payments made to C-corporation shareholder-employees. As...more

D.C. Circuit Limits Government's Ability to Collect on Personal Debt by Garnishing Assets of Closely Held Corporation, Reverses...

On July 8, 2016, the D.C. Circuit clarified the limits of the Federal Debt Collection Procedures Act (FDCPA). The Court held under D.C. and federal law that the government cannot satisfy a judgment against a co-owner and...more

DC Circuit Decision Likely to Reignite FERC Debate Over Tax Allowance for Pass-through Entities

The recent decision by the U.S. Court of Appeals for the District of Columbia Circuit in United Airlines Inc., et al., v. Federal Energy Regulatory, Case No. 11-1479, July 1, 2016 (United Airlines) will likely reignite a...more

Deductibility of Transaction Costs for a Target Company: No Safe Harbor in Deemed Asset Deals

On June 10, 2016, the Internal Revenue Service released a Chief Counsel Memorandum dated July 8, 2015, addressing the issue of whether a target S-corporation, which participated in a transaction in which the parties made a...more

Rethinking Choice of Entity — Section 1202 Stock

We tax advisors spend plenty of time assessing whether a particular business is better suited operating as a flowthrough entity or as a tax-paying “C corporation.” Flow-through entities generally include sole...more

A "PATH" to Substantial Tax Savings: Qualified Small Business Stock

In the early 1990s, Congress enacted the qualified small business stock (“QSBS”) rules to incentivize equity investments in certain corporations. The QSBS rules reduce the effective federal income tax rate on the gain...more

New IRS Audit Rules: Is Your Healthcare LLC Ready?

The Bipartisan Budget Act of 2015 (the “BBA”), which was signed into law in November 2015, contains significant changes to the way the IRS will audit partnerships beginning in 2018. These changes will also have far ranging...more

The New Partnership Audit Regime Will Be Here Soon – Are You Ready?

On November 2, 2015, the Bipartisan Budget Act (“Act”) was signed into law by President Barack Obama. One of the many provisions of the Act significantly impacts: (i) the manner in which entities taxed as partnerships will be...more

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