The Treasury Inspector General for Tax Administration says the IRS needs to improve the quality of its audits of small corporations. Listen: TIGTA reviewed whether IRS examiners followed proper procedures and guidelines when auditing the returns of small corporations. The IRS defines small corporations as corporations with assets of less than $10 million. Many corporations in the [...]
Tags: Announcements · IRS Audits · S Corporations
Tony Nitti has published a great piece over at The Tax Adviser which explains the current state of affairs on the issue of compensation of S Corporation shareholders. Here is the Executive Summary, but read the whole thing. S corporation shareholders generally prefer dividend distributions of their S corporations’ profits over compensation payments from the [...]
Tags: S Corporations · Tax Tips
Paul Caron reports that Bradley T. Borden (Brooklyn) has posted a defense of pass-through entities in Three Cheers for Passthrough Taxation, 131 Tax Notes 1353 (June 27, 2011), on SSRN. Here’s the abstract: This report addresses recent suggestions by the Obama administration, lawmakers, and others that some passthrough entities should be taxed as corporations. It argues [...]
Tags: C Corporations · S Corporations · Tax Policy
Martin A. Sullivan (Tax Analysts) has published Why Not Tax Large Pass Throughs as Corporations?, 131 Tax Notes 1015 (June 6, 2011): Most large profitable American businesses must pay the corporate income tax. Others are completely exempt from it. The unfairness of this is so plain even a 5-year-old can understand it. … The essence of [...]
Tags: Corporate Tax · S Corporations
Secretary of the Treasury Tim Geithner recently told the Senate Finance Comittee that removing small business owners’ option to be taxed as a corporation or an individual is an essential part of tax reform: Congress has to revisit this basic question about whether it makes sense for us as a country to allow certain businesses [...]
Tags: S Corporations · Tax Policy · The Economy
Robert Flach announces his publication of a new newsletter for sole proprietors and single-member schedule C filers entitled, aptly enough, The Schedule C Letter: THE SCHEDULE C LETTER is a bi-weekly newsletter that provides tax planning and preparation advice, information, and resources for sole proprietors and one-person LLCs who report their business activity on IRS Schedule C.¹ I have [...]
Tags: Business advice · C Corporations · S Corporations · Self-Employed Taxpayers · Tax Tips
Frequent readers of this blog know that we have maintained - ad nauseum, I am sure, for some – that all small businesses should incorporate or operate as an LLC in part because they are less likely to undergo IRS scrutiny. Well, if you can believe the Government Accountability Office GAO), this may all be about to change. WebCPA [...]
Tags: C Corporations · IRS Audits · S Corporations · Self-Employed Taxpayers · Unfiled Returns
