On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the Act), a sweeping bill with significant tax, energy and healthcare implications. This alert focuses on two key corporate tax aspects of the Act:
On July 16, 2021, Governor Newsom signed California Assembly Bill 150 into law, allowing certain owners of passthrough entities to find a way around the current $10,000 federal cap on state and local tax (SALT) deductions for individuals. The new law, applicable to tax years beginning on or after January 1, 2021 and ending before January 1, 2026, allows for many partnerships, limited liability companies taxed as partnerships, and S-Corporations to pay an entity level tax based on electing individual owners’ share of income, and then grants the owners a credit against California personal income tax for the full amount of tax paid at the entity level on their distributive share of California taxable income.
Continue Reading California Passes “Workaround” To Federal Limit on State Tax Deduction For Certain Owners of Pass-Through Entities
All states but one that impose a sales and use tax now have laws requiring out-of-state companies to collect tax if they have a significant economic presence in a state. The Governor of Missouri, the last remaining state, is expected to sign a similar law this month. The change stems from a 2018 United States Supreme Court case, the impact of which is far broader than many realize.
Continue Reading The Expanded Reach of States for Sales & Use Tax Purposes – More Than Just e-Commerce Retailers are Impacted
As reported in our earlier blog post The CARES ACT – Tax Relief, the federal CARES Act provides for forgiveness of indebtedness for eligible recipients of Paycheck Protection Program (“PPP”) loans in an amount equal to the sum of the recipient’s payroll costs, interest on mortgage obligations, rent obligations and utility payments (subject to certain conditions and limitations). Under federal law, any amount of covered loans forgiven under the CARES Act is excluded from gross income for federal income tax purposes.
Continue Reading California Conforms To Federal Income Tax Treatment Of PPP Loan Forgiveness
November is approaching and in an election year, that means candidates are making plans and promises. These promises and plans inevitably include something about taxes; and when it comes to taxes, it pays to be prepared. While we take no position on the candidates or proposals, in the event you are considering the timing of your tax decisions for the balance of the year and 2021, it is important to consider the potential impact of the election. The following items explain the current status of various tax proposals that might impact your planning.
Continue Reading Tax Planning Considerations Raised by Election-related Proposals
In Taylor Lohmeyer Law Firm P.L.L.C. v. United States, No. 19-50506, 2020 WL 1966844 (5th Cir. Apr. 24, 2020), the United States Court of Appeals for the Fifth Circuit held that a Texas-based estate and tax-planning law firm (“Taylor Lohmeyer” or the “firm”) could not invoke the attorney-client privilege to quash a summons by the Internal Revenue Service (“IRS”) seeking the identities of firm clients. In affirming the district court’s decision, the Court of Appeals ruled that Taylor Lohmeyer could not use the privilege as a “blanket” to circumvent compliance with the summons, but may have viable arguments to shield disclosure of specific documents through the use of a privilege log.
Continue Reading Fifth Circuit Holds that Law Firm Cannot Claim Privilege Over Client Identity in IRS Probe
Businesses, employees, and other taxpayers are incurring new and often significant expenses as they adapt and respond to the changes brought on by the COVID-19 pandemic. Several tax provisions may help to mitigate the impact of those costs, including new provisions enacted as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act as well as certain previously existing provisions of the Internal Revenue Code (“Code”).
Continue Reading COVID-19 Related Expenses
Executive Order N-40-20, signed by Governor Newsom on March 30, 2020, offers additional California tax relief to businesses and individuals. Below is a summary of significant business tax-related relief available as of April 3, 2020.
Continue Reading California Tax Relief Available to Businesses
On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, or the “CARES Act” to provide nearly 2 trillion dollars in aid and relief to individuals, businesses, and other entities in the wake of the spread of COVID-19. Included in the CARES Act are tax and loan provisions intended to provide financial relief to people and businesses suffering as a result of the disease.
The following summarizes certain key tax-related provisions in the CARES Act.
Continue Reading The CARES ACT – Tax Relief
As we all learn to cope with the unprecedented changes to our daily lives imposed by the COVID-19 crisis, we want to assure you that the Sheppard Mullin estate planning team is thinking of you and stands ready to assist you in any way possible.
These uncertain times have caused many of us to think about steps we might take to confirm that our affairs are in order and that we have prudently provided for our family members and other loved ones. To assist with that review, we provide the following tips:…
Continue Reading Estate Planning In Turbulent Times
As part of the federal government’s efforts to soften the economic effects from the Covid-19 pandemic, on Wednesday the IRS issued Notice 2020-17 announcing that federal income tax payments for the 2019 tax year otherwise due on April 15th may be postponed until July 15th 2020 without incurring interest or penalties on the amount due. In addition, the Notice also postponed to July 15th the due date for quarterly estimated federal income tax payments otherwise due on April 15th. Earlier statements by government officials had not indicated that the due date for quarterly estimated tax payments would also be extended.
Continue Reading Updated: Treasury and IRS Extend Time to both File and Pay Federal Income Taxes to July 15th; States Taking Their Own Approaches on Income and Similar Taxes