Recently, two of my articles were published – one in State Tax Notes magazine, the other in Tax Notes Today. Both are published by Tax Analysts, Inc.
Here’s the executive summary of the first, entitled Collecting the Minimum: A proposal for changes to the Minimum Tax collection rules (State Tax Notes, July 15, 2013:
EXECUTIVE SUMMARY
Currently, any business – corporation, LLC or partnership – which is formed in California is liable for a minimum tax of $800.00 per year. Failure to pay the tax can result in penalties and interest being assessed.
There are, however, situations in which the minimum tax liability acts as a disincentive to the proper winding down of a company. Moreover, under current law, there is no way for the FTB to collect the minimum tax from a non-operating company absent a fraudulent transfer. Despite this, the FTB will continue to attempt to collect the minimum tax from a company long after it has ceased doing business, and long after any real hope of collection has vanished.
To encourage companies to properly wind down, and allow individuals to form corporations which never do business without the fear of draconian penalties and interest, the legislature needs to provide clear directions to all. Currently, most businesses rely upon dicta from one case to guide their decision-making, putting them at risk of a different interpretation by a different court. Legislative action would give clear guidance to business owners and their advisors, while at the same time allowing the FTB to focus its collection efforts on more fruitful endeavors.
This paper examines the current situation, and offers reasonable proposals to give business owners and the FTB alike clear guidance, rather than the uncertain ground that exists today.
And here’s the summary for the second, entitled Streamlining the late ‘S’ election process (Tax Notes Today, July 10, 2013):
 ‘S’ corporations have existed since 1958. The purpose of the S Corporation was simple: to allow small businesses the ability to retain the liability protection of a corporation while still having a single layer of tax, as found in a sole proprietorship or partnership.
 Initially, the statutory deadline for filing an ‘S’ election was inflexible and the IRS believed it lacked the authority to grant relief from late ‘S’ elections, which were routinely denied. The Small Business Jobs Protection Act of 1996 gave the IRS the authority to treat certain late elections as timely filed. Since then, the IRS has issued many revenue procedures – in addition to the many court cases and letter rulings – intended to provide uniform criteria for relief from an untimely election. Currently, there are four revenue procedures – three for corporations, and another for other entities, such as LLCs, that must first elect to be treated as a corporation.
 While the existence of multiple options is a vast improvement over the hard-and-fast rule of the past, the current structure is still not taxpayer-friendly, and could be improved. This paper examines the status of the law and argues for the adoption of a form that eliminates much of the ‘clutter’ in the current system, which should make taxpayer relief simpler and more flexible
