IRS Actions Significant to Corporate Finance for the Week of August 13, 2007
This week the IRS issued:
- final regulations on partnerships and qualified small business stock; and
- final regulations on the treatment of qualified subchapter S subsidiaries and single-owner eligible entities that are disregarded from their owners for employment tax and certain excise tax reporting puproses. These regulations generally treat disregarded entities as separate entities for employment tax reporting purposes.
"The final regulations clarify that the separate entity is treated as a corporation for purposes of employment taxes and related reporting requirements. As provided in the proposed regulations, a disregarded entity continues to be disregarded for other Federal tax purposes. The final regulations clarify that an owner of a disregarded entity treated as a sole proprietorship is subject to taxes under the Self-Employment Contributions Act (SECA)...."
