To be treated as an S corporation, a corporation must elect S corporation status by filing Form 2553, Election by a Small Business Corporation. Reg. §1.1362-6(a)(2)(i). Compliance Note Form 2553 may also be used to file shareholder consents ( Reg. §1.1362-6(b)(3)(i)) and to select a tax year. Reg. §1.1378-1(e). It is clear that Form 2553… Read More

The deductibility of miscellaneous itemized deductions is temporarily repealed for tax years 2018 through 2025. Background Certain itemized deductions of an individual are treated as miscellaneous itemized deductions and are only allowed to the extent that their total exceeds two percent of the individual’s adjusted gross income (AGI) (Code Sec. 67(a); Temp. Reg. §1.67-1T). The… Read More

Traditionally, tax law provides numerous incentives for home ownership by allowing the deduction for mortgage interest and real estate tax. The Tax Cuts and Jobs Act modifies these popular tax benefits. Mortgage Interest Home mortgage interest is generally deductible if it is paid or accrued on acquisition indebtedness or home equity indebtedness secured by any… Read More

Reg. § 1.368-2 does not reflect P.L. 94-455, P.L. 96-589, P.L. 97-248, P.L. 98-369, P.L. 99-514 or P.L. 100-647. (b)(1)(i)Definitions.— For purposes of this paragraph (b)(1), the following terms shall have the following meanings: (A)Disregarded entity.— A disregarded entity is a business entity (as defined in § 301.7701-2(a) of this chapter) that is disregarded as… Read More

Re: 2017 Tax Cuts Act: What it Means For Businesses The Tax Cuts and Jobs Act was signed by President Trump on December 22. The Act makes sweeping changes to the U.S. tax code and impacts virtually every taxpayer. For businesses, tax benefits include a reduction in the corporate tax rate, increase in the bonus… Read More

The tax reform bill that Congress voted to approve Dec. 20 contains numerous changes that will affect businesses large and small. H.R. 1, known as the Tax Cuts and Jobs Act, would make sweeping modifications to the Internal Revenue Code, including a much lower corporate tax rate, changes to credits and deductions, and a move… Read More

WASHINGTON— The Internal Revenue Service reminds taxpayers with expiring Individual Taxpayer Identification Numbers (ITINs) to submit their renewal applications as soon as possible. Failing to renew them by the end of the year will cause refund and processing delays in 2018. The IRS mailed letters over the summer to more than 1 million taxpayers whose… Read More

If a tax return is examined by the IRS and the taxpayer does not agree with the results of the examination, further appeal within the IRS is permitted ( Reg. §601.106). 5 Once the IRS has issued a preliminary 30-day letter, the taxpayer has the right to appeal to a local Appeals Office by filing… Read More

Generally, all income taxes must be assessed within three years after the original return is filed (the last day prescribed by law for filing if the return was filed before the last day) ( Code Sec. 6501; Reg. §301.6501(a)-1). 51 In the case of pass-through entities, the three-year rule begins to run at the time… Read More

There is a common misconception that income taxes are never dischargeable in bankruptcy. In fact, you can discharge some back federal, state, and local income taxes in Chapter 7, Chapter 13, and Chapter 11 bankruptcy. Moreover, the penalties and interest attached to these taxes are dischargeable as well. Determining which back taxes are dischargeable can… Read More