The head of the U.S. Small Business Administration called for the repeal of a vast expansion of 1099 filing requirements scheduled to begin in 2012. In an open letter to small business owners, SBA Administrator Karen Mills repeated President Barack Obama’s Nov, 3 statements that the expanded requirement for small
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TOPICS / TAX
Business tax
AICPA Urges Repeal of Expanded 1099 Reporting Requirements
In letters to members of the House of Representatives and the Senate, the AICPA on Nov. 16 expressed its concerns about the compliance burdens being placed on businesses (including rental property owners) by recently expanded Form 1099 information-reporting requirements. The letters, signed by Patricia Thompson, CPA, chair of the AICPA’s
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FOREIGN TAX CREDIT RESTRICTIONS ENACTED New restrictions on the use of foreign tax credits (FTCs), along with other revenue-raising international tax provisions, were enacted Aug. 10, 2010, as part of the so-called Education Jobs Act (PL 111-226). The legislation adds IRC § 909, which provides generally that in the case
Deferring COD Income: Burden May Outweigh Benefit
The election provided in the American Recovery and Reinvestment Act of 2009 (ARRA) to defer until 2014 and spread over five years cancellation of debt income (CODI) has been touted as an attractive relief option for taxpayers struggling with cash flow problems. However, partnerships and S corporations and their owners
IRS Amends Plan for Uncertain Tax Positions
The IRS unveiled a number of significant changes to its plan to require certain business taxpayers to report uncertain tax positions on their tax returns (see Announcement 2010-75 and Announcement 2010-76). The changes, released in September, come in response to numerous comments received on the proposal and on the draft
Navigating Nexus
Nexus can be a hidden danger for a company with a multistate presence. Certain activities might cause nexus for sales and use tax, income tax, franchise tax or other business taxes. One key to successfully navigating these widely varying provisions is for tax professionals to review the statutes and rulings
Stock “Loans” Ruled Sales
In three cases this summer, the Tax Court ruled against purported stock loans that it said were sales. One case involved millions of dollars in built-in gain and IRS-asserted deficiencies totaling $30 million for Denver multibillionaire Philip Anschutz. Two other cases involved participants in the Derivium “90% stock loan” abusive
Whose Goodwill Is It?
The U.S. District Court for the Eastern District of Washington recently held that goodwill created while a dentist was employed by his solely owned corporation belonged to the corporation and not to him. As a result, the dentist was required to characterize as a corporate dividend rather than a long-term
IRS Issues Final Regulations on Stock Basis Reporting Requirements
The IRS issued final regulations on Wednesday regarding a new requirement for reporting of basis and other information by stockbrokers and mutual fund companies for most stock purchased in 2011 and all stock purchased in 2012 and later years (TD 9504). The final regulations implement a provision from the Energy
Online Selling and Third-Party Network Reporting
The payment settlement reporting requirements of new IRC § 6050W, which go into effect next year, apply broadly to transactions conducted by debit or credit card, as well as third-party network transactions. While CPAs’ clients can easily understand how accepting payment cards at point of sale might affect them, those
Company’s Deduction for Shareholder-Executive’s Pay Reduced
The Tax Court reduced a corporation’s deduction for compensation to its CEO, but by much less than the IRS sought. Factors favoring the taxpayer were consistent compensation policies and that the owner was the driving force behind successful operations. Weighing against the taxpayer for one tax year was a negative
Advance Pricing Agreements for SMEs
In today’s global economy, small and medium-size enterprises (SMEs) compete not only to make sales but to employ labor, consume raw materials, and obtain low-cost capital. SMEs now comprise some 97% of all U.S. exporters and produce almost one-third of all goods and services exported. But whenever companies cross borders
President Signs Small Business Jobs and Tax Relief Bill
On Monday, President Barack Obama signed into law the Small Business Jobs Act of 2010 (HR 5297). The bill, which Congress passed last week, expands loan programs through the U.S. Small Business Administration (SBA), strengthens small business preference programs for federal government projects, provides incentives for exporters, offers a variety
IRS Releases Final Schedule UTP, Incorporates Changes
In two announcements on Friday, the IRS unveiled a number of significant changes to its plan to require certain business taxpayers to report uncertain tax positions on their tax returns (Announcements 2010-75 and 2010-76). The changes come in response to numerous comments received on the proposal and on the draft
Small Business Stimulus Passes Congress
The House on Thursday passed the Small Business Jobs Act of 2010 (HR 5297) by a vote of 237–187, and sent it to the President, who is expected to sign the bill into law. The bill, which passed the Senate last week, expands loan programs through the Small Business Administration
Senate Passes Small Business Tax Relief
The Senate on Thursday passed the Creating Small Business Jobs Act of 2010 (part of the Small Business Jobs and Credit Act, HR 5297) by a vote of 61–38, and sent it back to the House of Representatives. The bill as passed by the Senate differs from the version the
IRS Releases Proposed Regs on Series LLCs
On Monday, the IRS released proposed regulations on the tax treatment of series limited liability companies (LLCs) and cell companies, proposing to treat the individual series or cells as separate entities for tax purposes (REG-119921-09). Eight states and Puerto Rico have enacted series LLC statutes that allow an LLC to
IRS Issues Proposed Regs Requiring Disclosure of Uncertain Tax Positions
The IRS issued proposed regulations (REG-119046-10) that would require certain business taxpayers to report uncertain tax positions on their tax returns. The regulations are the latest step in an initiative the IRS launched in January with the release of Announcement 2010-9. In April, the IRS released a draft Schedule UTP,
Draft Form for Small Business Health Insurance Credit Released
The IRS on Tuesday issued a draft form for businesses to use in figuring and claiming the new small business health insurance credit, starting this year. Draft Form 8941, Credit for Small Employer Health Insurance Premiums, leads taxpayers through the steps of determining the number of full-time equivalent employees, average
Comments Requested on Expanded Payment Information Reporting
The IRS requested comments on 2012-effective amendments to IRC § 6041 expanding requirements to report on Form 1099 business payments totaling $600 or more to any person in a calendar year. The amendments were made by the Patient Protection and Affordable Care Act of 2010 (PL 111-148). They provide that,
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