Tax and Business Law Blawg

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Federal and Texas state tax and business law—developments, planning strategies, and theory.

Author: Christopher Bourell is a solo practitioner in Austin, Texas.

Blawg Related Categories: Tax Law • States • Texas • Solo / Small Firm • Business Law

Recent Posts from Tax and Business Law Blawg

Sale of Personal Goodwill or Noncompetition Agreement?
In 1933 a New Hampshire teenager began a meatpacking business named Granite State Packing Company. The business grew and purchased another New England meat company, changing its name to Jac Pac Foods in the 1960s.…
Mr. Miller's Impossibly Poor Attempt to Evade Taxes is Still Tax Evasion
Earlier this month, I reported on the Supreme Court's decision in Boulware, where Mr. Boulware's conviction for tax evasion was overturned. Although Mr. Boulware may have been trying to defeat the payment of a tax,…
Mr. Boulware's Not-Quite-So-Criminal Diversion of Corporate Funds
This week the Supreme Court decided Boulware V. U.S. (S Ct, Mar. 3, 2008), standing for the proposition that you still have to owe taxes in order to evade taxes. Mr. Boulware diverted funds from…
Avoiding Investment Company Status When Forming a Corporation or Partnership
Quick Introduction to Forming Business Entities In most cases under the Tax Code, the formation of a corporation or partnership is a tax-free transaction. §§ 351, 721. When a taxpayer or group of taxpayers rearranges…
Watch Out for §2057 Recapture When Transferring Interests in Family-Owned Businesses
I was reminded last week of the Qualified Family-Owned Business Interest (“QFOBI”) Deduction for the US Estate Tax. In 1997, Congress decided to grant the QFOBI deduction of §2057 to alleviate the estate tax burden…
Tax Treatment of Salaries & Dividends in S Corporations
As I explained in my last post, dividends issued by corporations, including S corporations are not subject to Federal Employment Taxes. In an attempt to evade employment taxes, some owner-employees began taking dividend distributions in…
Reasonably Limiting Compensation to Reduce Employment Taxes in a Closely-Held S Corporation
Federal Employment Taxes – whether FICA and FUTA for employees or SECA for self-employed individuals – are imposed upon wages, compensation, and net earnings from self-employment. The combined tax rate for the employment tax is…
Trusts & Estates May Not Fully Deduct Costs For Investment Advice
Last week, the Supreme Court unanimously decided that fees paid by a trust for investment advice are deductible only to the extent the fees exceed 2% of the trust’s adjusted gross income under §67. Knight…
Affilitated Groups Under the Texas Margin Tax
The State of Texas has enacted a major revision to the Texas Franchise Tax. In fact, the tax has been so greatly changed, that we even changed its name -- to the Texas Margin Tax…