Biden Still Set to Eliminate Student Debt
Last Thursday, the Department of Education announced yet another round of student loan cancellation. This time, $1.1 billion in student debt will be forgiven for a total of 115,000 borrowers.
The previous round eliminated $5.8 billion in loans for 323,000 students with total and permanent disabilities. This most recent round of loan cancellation narrows eligibility to a very specific demographic: previous attendees of the ITT Technical Institute. The school, now defunct, was accused in 2016 of misleading and harassing students; now, former attendees are receiving retribution in the form of full student loan cancellation.
In the past weeks, the Biden administration has canceled approximately $6.9 billion in student loan debt for over 560,000 borrowers, with a current total of forgiven loans at $9.5 billion.
Accountants Have Their Eyes on QBIs
Last week, the AICPA addressed Congress in a letter, asking tax lawmakers to consider new legislation to the Tax Cuts and Jobs Act (TCJA) of 2017 that would allow all non-corporate business owners – like accountants – to benefit from the Qualified Business Income (QBI) tax deduction.
The QBI deduction isn’t something to take lightly—it’s a hefty 20% deduction. Under Section 199A(d) of the Small Business Tax Fairness Act, the deduction effectively lowers tax rates for pass-through entities that previously couldn’t benefit from the TCJA’s corporate tax cut.
IRS Ignores Tax Compliance for S-Corps
A report released by the Treasury Inspector General for Tax Administration shows that, where S-Corporation officers are vastly underreporting compensation, the IRS is not exercising enough compliance regulation to halt these tax avoidance schemes.
According to the report, the IRS selected fewer than 1% of all S-Corp tax returns filed between 2016 and 2018 for tax compliance examination. These 266,095 overlooked returns met the qualifications for examination: 1) profits exceed $100,000, 2) a single shareholder is listed, and 3) officers’ compensation was not claimed. The IRS’s oversight here, according to the report, totals approximately $3.3 billion in tax avoidance.
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