Amendment Introduced to Extenders Bill to Relieve Certain S Corp. Shareholders

The American Jobs and Closing Tax Loopholes Act of 2010 passed by the House last
month and being debated in the Senate includes a provision (Section 413) that
affects the self-employment tax treatment of certain small businesses and CPA firms
set up as S corporations and Limited Partnerships. This new provision would require
that certain S corporation owners and limited partners be subject to self-employment
tax on their share of distributable profits in excess of salary/guaranteed payments
for services. On June 9, the AICPA sent a letter to the Senate Finance and House
Ways and Means Committees urging them to reconsider the S corporation tax proposal,
providing suggested modifications should Congress move it forward. On June 14,
Senate Amendment 4342 was introduced to strike Section 413 from the bill. The AICPA
sent a letter to all U.S. Senators on June 14 urging them to support the amendment,
and many state CPA societies have weighed in with additional letters of support.

http://email.aicpa.org/cgi-bin15/DM/y/egI50axed10IIe0rXB0Eg
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