S Corporation Income Taxation

Strategies for information return penalties and Form 945 assessments

Penalties for failure to file correct information returns and backup withholding can be waived, but timely and correct responses to IRS notices are essential.

AICPA to Congress: Delay needed in BOI reporting deadline

Without a delay, “millions of small business owners become accidentally and unknowingly delinquent in their compliance,” reads the letter, signed by CEO Barry Melancon, CPA, CGMA.

CRFB leader: Tax policy may not be a Trump administration high priority

The head of the nonpartisan Committee for a Responsible Federal Budget told the AICPA & CIMA National Tax Conference that extending the Tax Cuts and Jobs Act would add $5 trillion to the national debt.

Corporate AMT prop. regs. impose new partnership information tracking system

This article outlines a five-step process for calculating a corporate partner’s distributive share related to the application of the corporate alternative minimum tax imposed on an applicable corporation pursuant to Sec. 56A.

Cleaning up intercompany debt

An intercompany loan between related corporations may be recharacterized as an equity contribution by the companies’ shareholders, resulting in a constructive dividend to the shareholders. This article focuses on a recent Tax Court case involving the proper characterization of purported intercompany loans between two S corporations.

Choice-of-entity analysis with the TCJA sunset approaching

Educators as well as practitioners can model the tax effects of choice of entity and possible scenarios of tax law change.

Intangible property repatriation rules finalized

The regulations terminate the continued application of the Sec. 367(d) annual inclusion in certain cases when intangible property is repatriated to the United States after previously being transferred to a foreign corporation.

Advising S corporation clients on reasonable compensation

Advising owner-shareholders can prove invaluable in meeting guidelines for distinguishing compensation from distributions.

Corporate AMT proposed regulations issued; some penalties waived

The IRS issued proposed regulations providing guidance on the corporate alternative minimum tax (AMT) and a notice that waives the penalty for failure to pay estimated tax with respect to the corporate AMT for 2024.

Recent developments in states’ PTETs

This column offers updates and resources regarding the passthrough entity taxes that have been implemented in three dozen states.

FinCEN uses TV ad to tell businesses about BOI

The PSA uses a chat between friends in a coffee shop to educate small businesses about beneficial ownership information reporting, which 32.6 million businesses must file.

BOI requirements roll along despite concerns about too little outreach

FinCEN, which oversees beneficial ownership information reports, has received just 2.7 million of the 32.6 million reports that it expects. Through June, FinCEN said, it has reached more than 90,000 stakeholders.

The double-tax consequences of an S corporation subject to BIG tax

A corporation’s built-in gains (BIG) tax cost of disposing of assets in liquidation within five years after its S election can be substantial.

FinCEN estimates millions of hours will be spent seeking BOI access

Almost 16,000 entities will spend over 8.7 million hours seeking access to beneficial ownership information in the first year, FinCEN estimated in a new notice.

Final regs. issued for 1% excise tax on corporate stock repurchases

The final regulations provide guidance regarding the reporting and payment of the excise tax on repurchases of corporate stock made after Dec. 31, 2022.

Current developments in S corporations

This annual update covers recent developments relating to S corporations including IRS relief for common inadvertent S election lapses; state passthrough entity taxes; and other cases, rulings, and regulations.

Updated FAQs provide details on phase-in timing of BOI access

The FAQs from Treasury’s Financial Crimes Enforcement Network said access to beneficial ownership information will be phased in, beginning this spring with a pilot program for some federal agency users and concluding in spring 2025, when financial institutions with customer due-diligence requirements will be able to review BOI.

Proposed regs. issued for 1% excise tax on corporate stock repurchases

Two sets of proposed regulations issued by the IRS provide guidance on the implementation of the new excise tax and on rules for the procedure and administration applicable to the reporting and payment of the tax.

AICPA: BOI ruling confuses businesses; enforcement should be delayed

In a letter to the Treasury secretary and the FinCEN director, the AICPA called for enforcement of beneficial ownership information reporting regulations to be suspended until after lawsuits are settled.

Recognizing transactions that trigger built-in gains or losses

Various types of transactions can cause an S corporation to incur built-in gains or losses, including Sec. 481 adjustments from a change in accounting method.
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