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Ways and Means Proposes Limited "Get Out of S Corp. Free" Card
By on September 24, 2021
Do you or your clients have an S corporation that you would like to convert to a limited partnership for tax purposes, but for the taxable gain thereon? Surprisingly, the Ways and Means tax proposals introduced on September 13 would permit a tax-free reorganization from an S corporation to a domestic partnership, with one catch.
Proposed Changes to Gift and Estate Tax Provisions
By on September 15, 2021
On September 13, 2021, the House Ways and Means Committee issued a series of proposals for consideration for the payment of the Biden Administration's desired $3.5 Trillion infrastructure Bill. The final legislation will likely look very different than the proposals as issued on Monday. Nevertheless, they are instructive as to the way things may develop over the next few months.
The Hidden Danger of Filing a Tax Court Petition, Part II
By on September 14, 2021
In an earlier blog post, I discussed the hidden danger of filing a Tax Court petition, i.e., that the IRS can raise new issues, including new penalties. In the case referenced in the prior blog post, Wegbreit v. Commissioner, T.C. Memo. 2019-82, the Notice of Deficiency included a 20% negligence penalty, the taxpayer filed a Tax Court petition and after the IRS filed its answer and conducted some discovery, the IRS amended its answer to include 75% civil fraud penalty.
Court Agrees with Taxpayer and Quashes Summonses to Third-Party Record Keeper
By on September 10, 2021
In a rare win for a taxpayer, a federal district court in Idaho turned down an IRS request to enforce third-party summonses for information and granted the taxpayers' motion to quash the summonses. The court said the IRS failed to properly notify the taxpayers of its intent to contact a third party during the course of the examination and therefore, the summonses was not enforceable.
TIGTA Says the IRS Should Be Pursuing Taxes From S Corporation Owners
By on September 8, 2021
The tax treatment of compensation to S-Corp owners has reared its head again in an August 11th report issued by the Treasury Inspector General for Tax Administration (TIGTA). As long as I have practiced tax law, tax treatment of distributions to S corporation shareholders has been an issue with no clear answer. Not surprisingly, the TIGTA report says the IRS should be doing more to examine distributions to S corporation owners.
