Tax Controversy and Litigation
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Final Section 199A Regulations: Interpretation of W-2 Wages and UBIA Thresholds May Significantly Limit the QBI Deduction

When it was announced that the Tax Cuts and Jobs Act included a new 20% deduction for qualified business income (“QBI”) of pass-through businesses, many business owners started planning for huge tax savings.  Hopefully, their exuberance was not misplaced and was based on a thorough review of the new tax law.  Aside from many types…

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Final Section 199A Regulations: Safe Harbor Created By Notice 2019-07 Brings Additional Certainty on Application of QBI Deduction to Rental Real Estate Enterprises

Along with the recent issuance of regulations under section 199A of the Internal Revenue Code (“I.R.C.”), the Internal Revenue Service (“the Service”) also published a revenue procedure setting forth a safe harbor under which rental real estate will be treated as a “trade or business” pursuant to I.R.C. § 199A.  For those in the real…

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Section 199A: How “Reasonable Compensation” Will Be Defined and How it May Impact the QBI Deduction

From its inception, Section 199A made it fairly clear that the deduction for qualified business income (“QBI”) would not apply to all income in respect of pass-through businesses.  Aside from limitations dependent on the nature of the industry (i.e., the “specified service trade or business” provisions of I.R.C. § 199A(d)(2)), the total wages paid to…

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Final Section 199A Regulations: Tax Planning for Businesses with Gross Receipts from Both Specified Services and Non-Specified Services

Although Section 199A will reduce the tax burden for many owners of pass-through businesses, classification as a “specified service trade or business” (“SSTB”) can severely limit its application for many others.  While certain businesses will find it extremely difficult, if not impossible, to avoid such a classification (e.g., law firms, accounting firms, consulting firms), there…

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Final Section 199A Regulations: Initial Takeaways on Clarification of Definition of “Specified Service Trade or Business”

Since the passage of the Tax Cuts and Jobs Act, business owners and tax practitioners alike have focused on the potential effect of Section 199A.  Though it has been clear for some time that the 20% deduction afforded to those with “qualified business income” would be a boon for businesses structured as pass-through entities, it…

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Tax Audits for Cash Businesses

Cash businesses generally do not leave the detailed paper trail that would enable a straightforward audit of gross income, expenses, and profits. Nonetheless, businesses that operate on a cash basis develop their own methodologies to track their revenues. The IRS, however, has its own auditing standards and methodologies for cash businesses. Discrepancies between those two…

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Tax Deductions for Small Business Owners

Small business owners make up the bulk of American businesses. According to the Small Business Administration, in 2010, there were nearly 28 million small businesses, making up 99.7% of U.S. employer firms. More than 50% of the small businesses were home-based, and nearly 75% were sole proprietors. The vast majority of Maryland businesses, then, can…

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Negligence and Tax Fraud: What’s the Difference?

It’s not uncommon for both business owners and individuals to feel anxiety when they file their taxes. The U.S. tax code is complicated, after all.  Not only that, but the changes signed into law late last year will impact your filing for 2018.  So when April 15th rolls around, all filings must follow the new…

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The Business Tax Audit: Risks and Consequences

At best, a business tax audit will consume only time and personnel resources. At worst, you and your business could face criminal charges and payments of additional taxes, fines, and penalties. Moreover, if the audit uncovers fraudulent activity, substantial underpayments of taxes, or unreported income an audit can be expanded from three to six years,…

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Rosenberg Martin Greenberg

25 South Charles Street, 21st Floor MD 21201
Phone: 410-727-6600
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Rosenberg Martin Greenberg

705 Melvin Avenue Annapolis, MD 21401
Phone: 410-727-6600
Map & Directions