Section 199A Implementation and IRS Examination Issues: Critical QBI Issues for Individual and Business Taxpayers
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Tax Law
- event Date
Tuesday, February 11, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
This CLE/CPE course will guide tax professionals on critical issues in the implementation of Section 199A qualified business income (QBI) deductions and essential items of focus for an IRS examination and audit. The panel will discuss what to expect when the IRS begins auditing tax returns claiming the QBI deduction, identifying potential pitfalls and methods to avoid them, recent IRS guidance on real estate investments, and critical QBI issues for taxpayers involved in a "specified service trade or business" under Section 199A.
Mr. Stein specializes in tax controversies, as well as tax planning for individuals, businesses and corporations. For more than 25 years, he has represented individuals with sensitive issue civil tax examinations where substantial penalty issues may arise, and extensively advised individuals on foreign and domestic voluntary disclosures regarding foreign account and asset compliance matters. Mr. Stein is well respected for his expertise and judgment in handling matters arising from the U.S. government’s ongoing enforcement efforts regarding undeclared interests in foreign financial accounts and assets, including various methods of participating in a timely voluntary disclosure to minimize potential exposure to civil tax penalties and avoiding a criminal tax prosecution referral. Mr. Stein is a frequent lecturer at national and regional conferences on topics including tax compliance sensitive issues, IRS examinations, State and Federal worker classification issues, etc.
Mr. Toscher has been representing clients for more than 35 years before the Internal Revenue Service, the Tax Divisions of the U.S. Department of Justice and the Office of the United States Attorney, numerous state taxing authorities and in federal and state court litigation and appeals. Mr. Toscher enjoys a unique combination of solid criminal defense experience and extensive substantive tax experience to assist individuals and entities subject to sensitive government inquiries. He has considerable experience as lead counsel in defending criminal tax fraud investigations (both administrative and grand jury investigations) as well as in defending criminal tax prosecutions (both jury and non-jury). Mr. Toscher’s tax practice includes a wide array of substantive areas including income taxes, estate taxes, employment taxes, sales taxes and property taxes. He is routinely involved in sensitive issue or complex civil tax examinations and administrative appeals on behalf of wealthy individuals and their closely held entities as well as large corporations involving both domestic and foreign tax related issues.
Mr. Stigile specializes in tax controversies as well as tax, business, and international tax. His representation includes Federal and state tax controversy matters and tax litigation, including sensitive tax-related examinations and investigations for individuals, business enterprises, partnerships, limited liability companies, and corporations. His practice also includes complex civil tax examinations, administrative appeals and tax collection proceedings (where he is widely respected for achieving meaningful resolutions of difficult tax collection issues). Mr. Stigile frequently writes and lectures on topics involving taxation.
Section 199A can be a gold mine for owners of pass-through entities and sole proprietors under current tax law. It allows a qualified taxpayer to deduct up to 20% of its QBI.
Final regulations for Section 199A and additional IRS guidance has set the stage and taxpayers filing returns claiming the QBI deduction is in full swing. To claim the 20% deduction, a taxpayer must be legitimately engaged in a trade or business and must demonstrate that he or she is regularly and continuously involved in the business activity, with the primary purpose of making a profit.
For taxpayers with income above the limits, the 20% deduction is limited to the greater of 50% of W-2 wages from the qualified trade or business or 25% of W-2 wages plus 2.5% of the basis of qualifying property. The aggregation of multiple trades or business is allowed under specific criteria, and taxpayers can combine W-2 wages and qualifying property to arrive at a more significant deduction.
For taxpayers providing services in a "specified service trade or business," the QBI deduction may not be available. This includes a trade or business where the principal asset is the "reputation or skill" of its employees or owners, such as law, accounting, performing arts, athletics, investing and investment management, and other specified areas.
Tax professionals must recognize the numerous pitfalls stemming from these complex tax rules to effectively guard against or handle an IRS examination and audit focused on the QBI deduction.
Listen as our panel discusses what to expect when the IRS begins auditing tax returns claiming the QBI deduction, the potential pitfalls and methods to avoid them, and crucial QBI issues for taxpayers involved in a "specified service trade or business" under Section 199A.
- Section 199A and recent IRS guidance
- Tax issues and potential pitfalls that arise in claiming the QBI deduction
- Determining taxpayer qualification
- Income limitations
- Understanding the "specified service trade or business" standard
- Entity planning strategies
- IRS examination and audit areas of focus
The panel will review these and other key issues:
- Recent regulations and IRS guidance for claiming the QBI deduction
- Key issues that arise for certain taxpayers and methods to overcome them
- The "specified service trade or business" standard and planning options for taxpayers
- What to expect when the IRS begins auditing tax returns claiming the QBI deduction
Learning Objectives
After completing this course, you will be able to:
- Understand recent IRS guidance for claiming the QBI deduction for certain taxpayers
- Determine the application of the "specified service trade or business" standard to taxpayers and planning options
- Identify critical issues that arise for certain taxpayers and methods to avoid IRS examination and audit of tax returns claiming QBI deduction
- Ascertain what to expect when the IRS begins auditing tax returns claiming QBI deduction
- Ascertain choice of entity planning techniques for certain taxpayers subject to the limitations under Section 199A
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of partnership tax rules, corporate structure, and partnership audit regulations.
Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
