With the Corporate Transparency Act hopefully in our rearview mirrors, I decided to take a brief break from my ongoing series on Subchapter S and report on a different topic. In the last few weeks, the Magistrate Division of...more
4/23/2025
/ Business Expenses ,
Business Losses ,
Department of Revenue ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Oregon ,
Section 162 ,
Section 183 ,
State Taxes ,
Tax Audits ,
Tax Court ,
Tax Deductions ,
Tax Liability ,
Tax Litigation
Now that the scurrying around and worrying relative to developments impacting the Corporate Transparency Act (“CTA”) that were coming at us with laser speed are on a slow simmer, I can turn my attention back to my multi-part...more
4/4/2025
/ Business Losses ,
Business Ownership ,
Change of Ownership ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Ownership Interest ,
S-Corporation ,
Shareholders ,
Tax Code ,
Tax Credits ,
Tax Deductions ,
Tax Liability ,
Tax Planning ,
Tax Returns ,
Treasury Regulations
In this Part XV of my multi-part series on some of the not-so-obvious aspects of Subchapter S, I explore a potential advantage that the S corporation has over the C corporation.
The Patient Protection and Affordable Care...more
In this Part XIV of my multi-part series on some of the not-so-obvious aspects of Subchapter S, I explore a narrow aspect of Subchapter S that is often ignored or forgotten. An S corporation is not always a mere extension of...more
The Wild Journey -
I am taking time out from my multi-part series on Subchapter S to report on the Washington capital gains tax. As you know, I have reported in several prior blog posts on the numerous challenges...more
Basic Rules -
IRC § 6501(a) generally requires the IRS to assess tax within three (3) years after a tax return is filed by the taxpayer.
There are two (2) notable exceptions to this rule under IRC § 6501(c) and (e),...more
The Tax Reform Act of 1986 (the “TRA 86”) was signed into law by President Ronald Reagan on October 22, 1986, exactly 38 years ago today. TRA 86 was sponsored by, among others, Representative Richard Gephardt (D-Missouri) in...more
In this Part XII of my multi-part series on some of the not-so-obvious aspects of S corporations, I explore a consistent theme – taxpayers lose fights with taxing authorities when they fail to maintain adequate records....more
10/16/2024
/ Business Records ,
Failure To Maintain ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Joint Tax Returns ,
Recordkeeping Requirements ,
S-Corporation ,
Tax Court ,
Tax Credits ,
Tax Planning ,
Treasury Regulations
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
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
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
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
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
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
The Taxpayer Advocate Service (“TAS”) is an independent body housed within the Internal Revenue Service (the “Service” or “IRS”). Its mission is to ensure taxpayers are treated fairly by the Service and that taxpayers know...more
More than 25 years ago, effective January 1, 1997, Treasury issued what have been called the “Check-the-Box” regulations (the “Regulations”). The Regulations ended decades of battles between taxpayers and the IRS over entity...more
6/17/2022
/ Banks ,
Business Entities ,
Check the Box Rules ,
Disregarded Entities ,
Employment Tax ,
Entity Classification ,
Excise Tax ,
Federal Taxes ,
Gift Tax ,
Income Taxes ,
IRS ,
Tax Liability ,
Tax Planning
As I previously reported, the Washington state capital gains tax has had a turbulent ride, commencing with a rough ride through the legislative process where it almost hit disastrous terrain on at least six (6) occasions....more
4/13/2022
/ Ballot Measures ,
Capital Gains ,
Capital Gains Tax ,
Constitutional Challenges ,
Income Taxes ,
Petition for Review ,
State Constitutions ,
State Taxes ,
Tax Legislation ,
Tax Rates ,
WA Supreme Court ,
Washington
As previously reported on May 7, June 17 and November 4 of last year, two lawsuits were filed in Douglas County Superior Court in Washington, seeking a declaration that the state’s new capital gains tax is unconstitutional....more
Like last year, 2021 has been a difficult year. The COVID-19 pandemic continues to be at the forefront of everyone’s existence. On top of that, the Delta variant and the most recently discovered Omicron variant have entered...more