• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Tax News: July ’17

Get PDF file

by on
in Small Business Tax

S corp alert. S corporation owners can only deduct losses up to the amount of their basis in the shares. But some business owners ignore this limit, much to the chagrin of the IRS. Now the tax collection agency’s Large Business and International Division is ramping up audits in this area. Its agents will contact shareholders to ensure they are properly limiting their losses to their stock basis.

Simple solution. The IRS has reminded taxpayers about the simplified method of deducting home office expenses. (News Release IR-2017-95, 5/5/17) Instead of deducting actual expenses based on business use percentage, you can deduct $5 per square foot of your home office, up to a $1,500 maximum. But the IRS didn’t tell you this: Frequently, someone with a business at home can claim a bigger deduction by tracking actual expenses.

CPAs march to D.C. Just before Memorial Day, several hundred CPAs gathered in our nation’s capital for a meeting of the American Institute of CPAs (AICPA) governing council. According to an AICPA press release, the top issues were tax reform, improvement of IRS taxpayer services, mobile workforce legislation and the fiscal state of the nation. “The AICPA has a long history of advocating for sound tax policy and assisting lawmakers on tax policy matters,” said AICPA President and CEO Barry C. Melancon. “We continue to provide unbiased facts and analysis to foster informed discussion and conformity with our newly updated Principles of Good Tax Policy.” He also noted CPAs’ commitment to supporting Congressional efforts to modernize tax administration.

Calling out private tax collectors. The private tax debt collection program being used by the IRS, which kicked off in April, is already under fire. Some House Democratic members are demanding a swift termination. The program authorized by a 2015 law allows the IRS to select private firms to go after tax debtors who aren’t being actively pursued. But critics complain that the concept, which was already tried twice, will actually lose money and subjects taxpayers to harassment. In addition, the private collection firms can call taxpayers after sending a letter, even though the IRS says it doesn’t initiate such calls to taxpayers. This could lead to confusion over who is a scammer and who is not. We will watch for new developments.

Related Articles...

Leave a Comment