William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence Weekly (Oct 31)

Posted by William Byrnes on October 31, 2018

Tax Reform Developments by William Byrnes & Robert Bloink

IRS Official Explains Link Between Business Expense and Fringe Benefit Rules for Tax-Exempt Entities Post-Reform
The 2017 tax reform legislation disallowed deductions for certain transportation-related benefits, including parking expenses, transit passes, commuter vehicles, as well as other types of employee fringe benefits. The law also modified the rules governing unrelated business income, so that tax-exempt entities that provide these benefits may now be subject to the unrelated business income tax (UBIT) on the benefits’ value. An IRS official recently explained that because of the close ties between Section 512 (UBIT) and Section 274 (fringe benefit rules), tax-exempt entities that are considering o fringe benefits to employees should look to the Section 274 expensing rules. For more information on tax reform’s impact on tax-exempt entities, visit Tax Facts Online and Read More.

Section 199A QBI Deduction Introduces Potential Compensation Planning Issues
The Section 199A deduction for the qualified business income of certain pass-through entities presents potential compensation planning issues for both small and large businesses. For example, partnerships and S corporations may wish to reevaluate guaranteed payments to partners and wages to S corporation shareholders. Larger companies may benefit from converting subsidiaries to pass-through entities and using interests in these entities to compensate certain executives where the deductibility of compensation would otherwise be limited by the post-reform restrictions contained in IRC Section 162(m). For more information on the Section 199A QBI deduction, visit Tax Facts Online and Read More.

IRS Extends Key Tax Filing Deadlines for Victims of Hurricane Michael in Florida and Georgia
The government has declared areas impacted by Hurricane Michael to be major disaster zones, and in recognizing this, the IRS has extended several key filing deadlines for individuals who reside or have businesses in the affected areas. The filing deadline has been extended for individuals who had extended their 2017 filing deadline to October 15, and the January 15, 2019 estimated tax filing deadline has been extended to February 28, 2019. Impacted entities required to file a Form 5500 also have until February 28, 2019 to file if the form was originally due on or after October 7, 2018 and before February 28. For more information on casualty loss deductions in major disaster zones, visit Tax Facts Online and Read More.

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