What Is — and Isn’t — Included in the Inflation Reduction Act of 2022
The Inflation Reduction Act of 2022 (IRA) was signed into law by President Biden on Aug. 16, 2022. It has been championed by the administration and Congress as the most sweeping climate and energy reform in history, altho...
IRS Clarifies Timing of Paycheck Protection Program Loan Forgiveness Basis Increase
The Internal Revenue Service (IRS) released three new revenue procedures last month clarifying Paycheck Protection Program (PPP) loan and other federal COVID-19 grant tax-exempt income recognition, expense deductions paid with COV... Jane Ryder, EA, CPA
Limited Partners and Self-Employment Tax
As tax professionals, we are often given Schedule K-1 forms by our clients in order to report their income and/or losses from their investments in pass-through organizations. How involved are we, ... Keith A. Espinoza, EA
Recent Court Cases of Interest
Gambling Loss Not Deductible as Casualty Loss The Ninth Circuit Court of Appeals has ruled that the taxpayer’s gambling losses did not qualify as deductible casualty losses. The taxpayer gambled occasionally, but only small amounts, and... TheTaxBook
IRS Updates Small Business Accounting Method Regulations
The Internal Revenue Service (IRS) has issued final regulations to implement the changes to the accounting method rules made by the Tax Cuts and Jobs Act (TCJA). Under Internal Revenue Code (IRC) §448(c), a business with gross receipts under $25 m... TheTaxBook
Correcting Partnership Returns After the Centralized Partnership Audit Regime
Practitioners who make or find errors on a filed Form 1065 for their partnership clients may find themselves in for a bit of a shock when it comes to correcting those errors. Congress passed the Bipartisan Budget Act (BBA) of ... David Woods, EA
Reasonable Compensation: What Is It, Why Is It, and How the Heck Do We Get Our Clients to Understand It?
We doubt reasonable compensation compliance was part of your New Year’s resolution. However, the beginning of the year is the best time to address reasonable compensation with your clients. Getting all your ducks in a row now will make the end of the ... Paul S. Hamann and Jack Salewski, CPA
An Inquiry Into the Factors Aiding Clemency for Foreign Corporations Requesting Protective Tax Return Filing Deadline Waivers
Foreign corporations (FCs) often have varying degrees of U.S. business activities which in turn subject them to varying degrees of U.S. tax exposure. Anthony (“Tony”) Malik, EA
The Tax Cuts and Jobs Act Moves the U.S. Closer to a Territorial Tax System
The Tax Cuts and Jobs Act (TCJA) fundamentally changes the taxation of outbound activities of U.S. corporations and foreign corporations doing business in the U.S. and moves the U.S. international tax regime closer to a territorial system on par with other developed countrie... Sean Clancy, JD; Frank Emmons, JD; Shahzad Malik, JD
A New Opportunity for Nonresident Aliens: Ownership in an S Corporation Introduction
Changes to U.S. tax law brought about by the 2017 Tax Cuts and Job Acti (TCJA) have affected many longstanding tax planning tools. One favorable change amends the rules regarding the persons who can own shares of an S corporation. Historically, the S corporation election was ... Rusudan Shervashidze, JD; Stanley C. Ruchelman, JD
Impact of Tax Reform on Choice of Entity
The tax reform legislation known as the Tax Cuts and Jobs Act that was passed by Congress and signed by President Trump on December 22, 2017, has significantly changed how many businesses and their tax advisors approach the choice of entity decision. When deciding on how to be cla... Timothy C. Smith, JD
Undisclosed Foreign Accounts: Protecting the Executor
An executor administering an estate with undisclosed foreign accounts is exposed to substantial risks that may not be apparent. The following discussion is intended for executors and administrators who wish to understand and avoid those risks.1 A Typical Scenario A taxpayer dies. An executor is appointed and learns of foreign accounts: Tose foreign accounts hold investments. The ... Frank Agostino, Esq., Nicholas R. Karp, EA, USTCP
Taxation of Dividends From Foreign Corporations
U.S. persons frequently own legal entities abroad to pursue a variety of economic interests. Common U.S. ownership scenarios include expatriates forming foreign entities to locally operate businesses, U.S. residents forming foreign entities to capitalize on expansion opportunities, and entrepreneurial immigrants coming to the U.S. More often than not, these foreign entities default to corporate status à la the tax law’s default classification... Anthony (“Tony”) Malik, EA