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Tax Controversy News

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

Brandon N. Mourges | Feb 1, 2019

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…

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

Brandon N. Mourges | Jan 31, 2019

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…

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

Brandon N. Mourges | Jan 31, 2019

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…

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

Brandon N. Mourges | Jan 29, 2019

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…

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

Brandon N. Mourges | Jan 28, 2019

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…

Opportunity Zones: The Good, the Bad, and the Yet to be Defined

Brandon N. MourgesMichael J. March | Jan 17, 2019

The Tax Cuts and Jobs Act (“TCJA”) provided the most comprehensive update to the tax code in over two decades. Of the many changes the TCJA provided, Sections 1400Z-1 and 1400Z-2 of the IRC are of the most heavily discussed and analyzed by taxpayers and tax practitioners. Collectively, these sections provide the opportunity for an…

Year-End Tax Planning: More Important This Year Than Ever

Dec 19, 2018

It’s the holiday season! The next few weeks will be spent in winter festivities, getting together with friends and family, and rushing around to the sound of holiday music. Major Tax Changes Stem from the Tax Cut and Jobs Act But you know what that means. At the end of the holiday season stands the…

Tax Audits for Cash Businesses

Dec 13, 2018

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…

Offshore Update: IRS Releases Memorandum Addressing Updates to Voluntary Disclosure Practice After Closing Offshore Voluntary Disclosure Program

Brandon N. Mourges | Dec 4, 2018

Now, More than Ever, Taxpayers with Lingering Offshore Tax Non-Compliance Must Seek Professional Assistance November 30, 2018 On November 20, 2018, the Internal Revenue Service (“the Service”) released a memorandum containing important updates regarding its Voluntary Disclosure Practice (“the Memo”).  Although the Memo provides significant guidance as a result of the closing of the Offshore…

What to Know About Wayfair and Its Impact on Maryland Sales Tax Audits

Brandon N. Mourges | Nov 12, 2018

Earlier this year, the Supreme Court decided on the much-anticipated case of South Dakota v. Wayfair, 585 U.S. ___, 138 S.Ct. 2080 (2018).  At issue was the validity of a statute applying sales tax to internet retailers that had very limited economic nexus to the state (i.e., without property or employees in the state).  By…

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Phone: 410-727-6600
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