Category Archives:Podcast

Nov. 02.

Before we get too festive..all of us need to understand how the “Qualified Business Income (QBI) Deduction (Sec. 199A)” will effect our clients..

The American Institute of CPA’s tax section recently published a “Q&A” on  Qualified Business Income (QBI) Deduction (Sec. 199A)….

All tax professionals need to spend some time understanding its implementation and use.

So lets get started….

Qualified Business Income (QBI) Deduction (Sec. 199A)

What are some general rules of thumb of Sec. 199A?

The qualified business income (QBI) deduction of Sec. 199A is limited to 20% of the excess of taxable income over net capital gain. For example, suppose a taxpayer has $100,000 of QBI, $120,000 of capital gain, and $40,000 of deductions. Taxable income in this example is $180,000, and the excess of taxable income of net capital gain is $60,000. Thus, the tentative tax deduction of $20,000 ($100,000 QBI x 20%) is limited to $12,000 ($60,000 x 20%).

If taxable income is less than $157,500 (single) or $315,000 (married), then the QBI deduction is simply 20% of the lesser of QBI or taxable income other than captial gain (subject to the taxable income limitation), regardless of whether the business is a specified service trade or business (SSTB) or whether the business pays W-2 wages.

If taxable income is greater than $207,500 (single) or $415,000 (married), and the QBI is from an SSTB, the QBI deduction is $0. However, if the taxpayer has QBI from other sources, a deduction is still allowed for the non-SSTB businesses. If the QBI is from a non-SSTB, the deduction is allowed, but is limited to the greater of:

  1. 50% of the taxpayer’s allocable share of the W-2 wages paid by the business, or
  2. 20% of the taxpayer’s allocable share of the W-2 wages paid by the business plus 2.5% of the taxpayer’s allocable share of the unadjusted basis of qualified property.

If the taxable income is between $157,500 and $207,500 (single) or $315,000 and $415,000 (married), both the prohibition on SSTBs and the W-2 and property limitations partially apply. See our Sec. 199A flowchart and listen to our podcast: Sec. 199A: What is it and whom does it apply.

What types of businesses are treated as specified service trades or businesses that are generally prohibited from generating QBI?

SSTBs include “any trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners; or any trade or business which involves the performance of services that consist of investing and investment management, trading, or dealing in securities, partnership interests or commodities.” Engineering and architectural businesses are specifically removed from the definition of an SSTB.

The recently released proposed regulations provide a de minimis exception that will allow a business that both sells product and performs services to avoid being treated as an SSTB. Proposed Regs. Sec. 1.199A-5(c) states that if a trade or business has gross receipts of $25 million or less for the tax year, it will not be treated as an SSTB as long as less than 10% of the gross receipts of the business are attributable to the performance of services in one of the disqualified fields. If a business has gross receipts of more than $25 million, a similar de minimis rule exists, but 10% is replaced by 5%.[MG1]

Listen to the podcast: Sec. 199A: Application to non-specified service businesses.

What guidance has the IRS issued regarding Sec. 199A?

The IRS recently issued proposed regulations regarding the qualified trade or business income deduction under Sec. 199A (REG-107892-18). The IRS also issued Notice 2018-64, which provides guidance on how to compute W-2 wages for purposes of the deduction, along with FAQs. The proposed rules include a way that taxpayers can aggregate separate trades or businesses. The proposed regulations also add an anti-abuse rule designed to prevent taxpayers from separating out parts of an otherwise disqualified business in an attempt by the taxpayer to qualify those separated parts for the Sec. 199A deduction.

Does the AICPA have a flowchart on Sec. 199A?

The AICPA Tax Section has developed a flowchart exclusively for Tax Section members to help them with the QBI deduction. Download it now.

If a U.S. partnership has disregarded foreign manufacturing entities, does the QBI deduction only apply to the U.S. manufacturing?

Yes, the QBI deduction only applies to activities within the U.S.

How are wages calculated for purposes of the 50% limitation (i.e., what number is used)?

W-2 wages are total wages before any elective deferrals such as Sec. 401(k) or Sec. 457 deferrals. As such, a general rule of thumb is to use the Medicare wages reported on the W-2. Section 199A(b)(4) references Sec. 6051(a)(3) and (8). There are exceptions.

How do wages paid to the owner(s) of an S corporation factor into the QBI calculations?

Wages paid to S corporation owner(s) are factored into the calculation two ways:

  • Section 199A(c)(4) says that QBI does not include reasonable compensation paid to the S corporation shareholder. The reasonable wages paid to an S corporation shareholder reduces the pass-through QBI allocated among the shareholders. The wage income of the shareholder is not QBI.
  • Section 199(b)(2) says the QBI deduction is the lesser of 20% of QBI, or 50% of wages. Section 199(b)(2) doesn’t say anything about excluding wages paid to an S corporation shareholder; wages paid to shareholders are included in the 50% calculation.

Is it safe to say that an S corporation with a single employee, the sole owner, does not qualify for the QBI deduction?

No. If the lesser of QBI or taxable income is less than $157,500 (single) or $315,000 married, the QBI deduction is simply 20% of the lesser of QBI or taxable income (subject to limitations) regardless of the wages paid. If the taxable income of the shareholder is greater than these amounts, the shareholder’s Sec. 199A deduction might be limited based upon the W-2 wages limitation or the limitation based upon wages and investment in qualified property.

How are wages paid to an S corporation shareholder’s spouse or children treated?

All wages paid by the S corporation qualify in the computation of the W-2 wages expense limitation. If the 20% deduction is otherwise limited (e.g., the shareholder is above the income thresholds), the payment of reasonable wages for services rendered by the spouse and children may increase the Sec. 199A deduction.

Under what conditions will a QBI deduction be allowable for rental real estate?

Proposed Regs. Sec. 1.199A-1(b)(13) provide that a trade or business is defined under a Sec. 162 judicial definition. As a result, the trade or business status of a real estate rental activity is uncertain and may lead to inconsistent treatment amongst taxpayers attempting to claim the Sec. 199A QBI deduction. The AICPA has recommended that the Department of the Treasury and the IRS provide assurance that rental real estate activities are generally considered a trade or business. Further, guidance is needed on whether there are specific circumstances in which rental real estate activities would not generate qualified trade or business income under the adopted Sec. 162 trade or business standard.

What if I rent my real estate to my SSTB?

Real estate rented to a business which is commonly owned with the real estate owner is automatically treated as a qualified trade or business. The net rental income will have the same character (SSTB or non-SSTB) as the operating business. “Commonly owned” is at least 50% common ownership. Ownership by the spouse, children, grandchildren and parents is attributed to the owner.


Would a royalty interest in an oil and gas well qualify for the QBI deduction?

Unlikely, because a royalty interest will not likely be considered a trade or business. On the other hand, a working interest should qualify.

If a taxpayer has an interest in a profitable passive partnership, will he or she qualify for the QBI deduction?

Yes, nothing in Sec. 199A requires active or material participation. The limitations apply.

How is QBI treated if a taxpayer has an interest in an unprofitable passive partnership where none of the loss is allowed under Sec. 469?

Since the passive loss is disallowed and suspended for regular income tax purposes, the loss will not yet enter into the QBI computations. The reduction in QBI will occur in the year in which the suspended passive activity loss carryover is allowed.


Jul. 11.

Ninth Circuit affirms the Tax Court -Payments by one spouse to another were Alimony!!

Ninth Circuit finds payments were alimony and not property settlement

Leslie v. Comm., (CA 9 6/6/2018) 121 AFTR 2d ¶2018-828

The Court of Appeals for the Ninth Circuit, affirming the Tax Court, has concluded that payments by one spouse to another were alimony, deductible by the payor and includible in the recipient’s income.

observation: Under the Tax Cuts and Jobs Act (TCJA, P.L. 115-97, 12/22/2017), for any divorce or separation agreement executed after Dec. 31, 2018, or executed before that date but modified after it (if the modification expressly provides that the new rules apply), alimony and separate maintenance payments are not deductible by the payor spouse and are not included in the income of the payee spouse.

Background on alimony. Generally, property settlements (or transfers of property between spouses) incident to a divorce do not give rise to deductions or recognizable income. (Code Sec. 1041) On the other hand, for any divorce or separation agreement executed before 2019 (i.e., for the years at issue here), amounts received as alimony or separate maintenance payments are included in gross income and taxable to the recipient (Code Sec. 71(a), before repealed by TCJA) and deductible by the payor in the year paid. (Code Sec. 215(a), before repealed by TCJA)

An alimony or separate maintenance payment is one that meets the following four requirements:

  1. The payment must be made under a “divorce or separation instrument”;
  2. The instrument must not designate the payment as not includible in the recipient spouse’s gross income under Code Sec. 71 and not deductible by the payor spouse under Code Sec. 215;
  3. The payor and payee spouses must not be members of the same household at the time the payments are made; and
  4. The payor’s obligation to make the payment must end at the death of the payee spouse. (Code Sec. 71(b)(1))

Background on constructive receipt. Income not actually received is constructively received and reportable if it’s within the recipient’s control. Cash basis taxpayers must report money unconditionally subject to their demand as income, even if they haven’t received it. However, there’s no constructive receipt if the amount is available only on surrender of a valuable right, or if there are substantial limits on the right to receive it. (Reg § 1.451-2(a))

Facts. After Maria Leslie’s marriage to Byron Georgiou came to an end, marital separation negotiations began in 2003 and continued for three or four years. A major reason for their length was the division of fees that Georgiou, an attorney,hoped to get from certain litigation (the Enron litigation) in which he would receive a substantial referral fee.

Under the marital separation agreement (MSA), Leslie received $7,000 per month in spousal support which would end with either party’s death. Under a separate section of the MSA entitled “Division of Community and Co-owned Property”, Leslie was awarded nine rental properties. She was also awarded 10% of whatever fee Georgiou received as a result of the Enron litigation as spousal support taxable to her; the MSA did not say whether this payment would terminate in the event of either party’s death. In addition, under the same section of the MSA, Georgiou was to pay, contingent on his receiving his split of the Enron fees, an additional $355,000 lump sum to Leslie as spousal support. The MSA expressly specified that the obligation to make the $335,000 payment would terminate upon Leslie’s death.

Georgiou received a referral fee of $55 million from the Enron litigation spread out from 2008 to 2010. He paid the $355,000 to Leslie in 16 separate payments from 2006 to 2007. He deposited the 2009 Enron payment to Leslie into a bank account that had both his name and Leslie’s on it. But Leslie credibly testified that she had no control over the account: she wasn’t given any checks to sign from the account, and her impression of the payment was that it wasn’t yet legally hers. In January of 2010, she filed a petition in state court to gain control of the account, which Georgiou opposed, and the state court at first refused to grant. The Tax Court noted that it was not clear from the record when or if Leslie ever gained control over the account containing the 2009 payment.

On her 2009 tax return, Leslie excluded from taxable income the 2009 Enron litigation payment from Georgiou.

Parties’ positions. Leslie argued that the 2009 Enron litigation payment she received (which didn’t expressly terminate on her death under the MSA) didn’t qualify as alimony and was therefore a nontaxable property settlement. As a fallback position, she argued that even if the amount was taxable, she didn’t receive it in 2009: she did not have control over the bank account; she did not have access to it; and did not even know it existed.

On the other hand, IRS argued that the 2009 payment qualified as alimony under Code Sec. 71 and was thus taxable to Leslie. And, even if Leslie didn’t have knowledge or control over the trust, Georgiou should be considered Leslie’s agent, thus giving her constructive receipt over the funds.

Tax Court decision. The Tax Court held that the 2009 payment qualified as alimony under Code Sec. 71. While nowhere in the MSA was there a condition that terminated Georgiou’s obligation to pay the contingent referral fee upon Leslie’s death, state law could supply the missing termination-on-death-of-payee condition for alimony under Code Sec. 71(b)(1)(D).

Under then-applicable California law, except as otherwise agreed by the parties in writing, the obligation of a party under an order for the support of the other party terminates upon the death of either party or the remarriage of the other party. The mere failure to include language terminating support upon death was not enough to constitute a waiver. (Cal. Fam Code §4337 (West 2013)) Accordingly, the Tax Court found that by operation of California law, the payments from the Enron settlement would have terminated upon Leslie’s death. (Leslie, TC Memo 2016-171, see “Tax Court rules on alimony and theft loss deduction”)

However, the Tax Court also concluded that there was no constructive receipt and that Leslie did not receive the 2009 Enron payment in the 2009 tax year. The Tax Court noted that it has held that knowledge of funds (something Leslie didn’t have) was necessary for constructive receipt. (Furstenberg, (1984) 83 TC 755) And the fact of her unsuccessful petition to state court to gain control indicated that, even after Leslie became aware that the funds were in an account, she still had no power to get them. Further, there was no evidence suggesting that Georgiou had any authority to act as Leslie’s agent; Georgiou’s interest was adverse to Leslie’s, as shown by his opposition to her state court petition to gain access to the account.

Appellate decision. The Ninth Circuit, affirming the Tax Court, rejected Leslie’s contention that the payments should have been treated as a lump-sum payment not subject to federal income tax under Code Sec. 1041(a).

The Ninth Circuit found that Code Sec. 71(b) plainly applied to the payments at issue:

  • The payments were received “under a …separation instrument”. (Code Sec. 71(b)(1)(A))
  • The separation instrument designated the payments as “taxable to Ms. Leslie and deductible to Mr. Georgiou as spousal support”. (Code Sec. 71(b)(1)(B))
  • Leslie and Georgiou were “not members of the same household at the time such payment[s][were] made”. (Code Sec 71(b)(1)(C))
  • By operation of California law, the liability to make the payments would have ended upon Georgiou’s death. (Code Sec. 71(b)(1)(D); Cal. Fam. Code §4337)

The Ninth Circuit noted that Leslie conceded that Code Sec. 71(b) provided the applicable definition of alimony and that the payments in question met the statutory definition of Code Sec. 71(b).

The Court declined Leslie’s invitation to reject the statute’s plain meaning, stating that when a statute has a plain meaning, it is that meaning that the Court applies. (Hughes Aircraft Co. v. Jacobson (S Ct 1999) 525 U.S. 432) Further, the Ninth Circuit stated that courts “do not resort to legislative history to cloud a statutory text that is clear”. (Ratzlaf v. U.S., (S Ct 1994) 510 U.S. 135)

Mar. 27.

President Trump’s first executive order targets Obamacare… How do we proceed ?

2017 Health Care Reform: President Trump’s first executive order targets Obamacare

President Trump’s first executive order, signed hours after taking office, stated his intent to seek prompt repeal of the Affordable Care Act (ACA) and, pending repeal, directed agency and department heads to exercise all authority and discretion available to them to minimize the ACA’s impact.

Although the executive order does not itself undo or repeal the ACA, it nonetheless delivers a strong statement on the direction that Trump wants to go and his ideal timeframe.

Specifically, the executive order directed the Secretary of Health and Human Services  Tom Price,  and other department and agency heads to exercise all available authority and discretion to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications”.

The order also directed the HHS Secretary and other department heads to provide flexibility to the States and “encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance”.

Although Trump did not specify which parts of the program would be affected by his order, Kellyanne Conway, counselor to the president, said on ABC’s “This Week” program that President Trump “may stop enforcing the individual mandate”.

According to Reuters, healthcare experts have been speculating that President Trump could do this by expanding the exemptions to the mandate.

Although the Trump Administration, and HHS can’t simply repeal the individual mandate—which is law passed by Congress and signed by President Obama—they could make the regulatory exemptions from it so broad that the mandate (which is a critical component of the ACA) is weakened, if not completely ineffective.

Trump’s administration could also decide to delay or not enforce the employer mandate, experts said, or it could alter, or fail to enforce, requirements that insurers cover a basic set of health benefits in all of their plans, from maternity and newborn care to mental health services.

 Back in 2013, the Obama Administration used its executive authority to delay the employer mandate…

Make sure your clients understand that the Affordable care Act is still an enforceable statue.  The IRS can and will take action in the future to enforce its provisions.


Over the weekend… David Morgan and Richard Cowan of Reuters expressed the following observations about the events in the U. S. House of Representatives that recently happened on March 24, 2017…

“President Donald Trump failed on Thursday to convince enough skeptical members of his own Republican Party to begin dismantling Obamacare, forcing the House of Representatives to delay a vote on the healthcare legislation.

The day was designed to be a big symbolic win for conservatives, with Trump and House Republican leaders planning the vote on the seventh anniversary of former Democratic President Barack Obama signing his namesake healthcare law, formally known as the Affordable Care Act, which became a favored target of Republicans.

Instead, the vote was postponed indefinitely, dealing a setback to Trump in what he hoped would be his first legislative victory. His staff and allies had billed him as “the closer” for high-stakes negotiations with lawmakers.

The House replacement plan, formally called the American Health Care Act, would rescind the taxes created by Obamacare, repeal a penalty against people who do not buy coverage, slash funding for the Medicaid program for the poor and disabled, and modify tax subsidies that help individuals buy plans.

Conservative Republicans objected to the bill because they thought it did not go far enough, and was too similar to Obamacare. Moderate Republicans thought it was too hard on their constituents.

Groups of lawmakers from both camps have met with Trump, and a gathering of moderates known as the “Tuesday Group” was still set to meet with him at the White House on Thursday.

The Republicans have a majority in the House but because of united Democratic opposition, can afford to lose only 21 Republican votes. As of Thursday morning, NBC News said that 30 Republicans had planned to vote “no” or were leaning that way.

With this delay, House of Representatives Speaker Paul Ryan and his Republican leadership team will continue to search for ways to alter the legislation and bring it to a vote.

Even if it does get approval from the House, the legislation faces a potentially tough fight in the Republican-controlled Senate.

The House and Senate had hoped to deliver a new healthcare bill to Trump by April 8, when Congress is scheduled to begin a two-week spring break.

The delay in the house vote is likely to contribute to the ups and downs that have marked hospitals and some insurers for the past month. Most Wall Street analysts are expecting hospital and insurer stocks to be volatile as the likelihood of new healthcare legislation rises and falls.

The nonpartisan Congressional Budget Office estimated 14 million people would lose medical coverage under the Republican plan by next year. It also said 24 million fewer people would be insured by 2026. “…


The take away from both occurrences for our clients is to make sure they are aware of the potential penalties of not carrying health insurance and the need to adhere to the ACA rules and regulations.

We may hear additional direction from Secretary of Health and Human Services Tom Price in the near future…so stay alert as to what changes may affect our tax planning form 2017.

Oct. 29.

Tax Court concludes shareholder intended his advances to be loans…. NOT compensation. !

What are the factors that an owner of a closely held “S corporation “must recognize to avoid repayments of personal expenses as ‘compensation’…REALLY !

Scott Singer Installations, Inc., TC Memo 2016-161TC Memo 2016-161

The Tax Court has concluded that an S corporation’s payment of personal expenses on behalf of its sole shareholder/officer should not be characterized as wages subject to federal employment taxes. Instead, the Court found that they were repayments of loans made to the S corporation.

Background. The proper characterization of transfers by shareholders to corporations, as either loans or capital contributions, is made by reference to all the evidence, and the burden of proving that a transfer is a loan falls on the taxpayer. (Dixie Dairies Corp., (1980) 74 TC 47674 TC 476)

Courts have established a nonexclusive list of factors to consider when evaluating the nature of transfers of funds to closely held corporations. Such factors include:

  1. The names given to the documents that would be evidence of the purported loans;
  2. The presence or absence of a fixed maturity date;
  3. The likely source of repayment;
  4. The right to enforce payments;
  5. Participation in management as a result of the advances;
  6. Subordination of the purported loans to the loans of the corporation’s creditors;
  7. The intent of the parties;
  8. The capitalization of the corporation;
  9. The ability of the corporation to obtain financing from outside sources;
  10. Thinness of capital structure in relation to debt;
  11. Use to which the funds were put;
  12. The failure of the corporation to repay; and
  13. The risk involved in making the transfers. (Calumet Indus., Inc., (1990) 95 TC 25795 TC 257)

That is, the inquiry before a court is “whether the transfer… constitutes risk capital entirely subject to the fortunes of the corporate venture or a strict debtor-creditor relationship”. ( Dixie Dairies Corp. ) Transfers to closely-held corporations by controlling shareholders are generally subject to heightened scrutiny.

Facts. Richard Scott Singer was the sole shareholder and president of an S corporation called Scott Singer Installations, Inc. (the corporation), and served as its sole corporate officer. The corporation was primarily engaged in servicing, repairing, and modifying recreational vehicles; it also sold cabinets used in the construction of homes. Mr. Singer worked full time for the corporation and occasionally employed a service technician, two laborers, and an individual to help with the corporation’s Internet sales.

Between 2006 and 2008, Mr. Singer advanced a total of $646,443 to the corporation to fund business growth. The corporation struggled from 2009 to 2011 and Mr. Singer borrowed another $513,099, which he advanced to the corporation. Mr. Singer also began charging business expenses to personal credit cards. The corporation reported operating losses of $103,305 for 2010 and $235,542 for 2011. During these years, the corporation paid $181,872 of Mr. Singer’s personal expenses by making payments from its bank account to Mr. Singer’s creditors.

All of the advances were reported as shareholder loans on the corporation’s general ledgers and Form 1120S (U.S. Income Tax Return for an S Corporation), but there were no promissory notes between Mr. Singer and the corporation, there was no interest charged, and there were no maturity dates imposed. The corporation did not deduct the payment of Mr. Singer’s personal expenses on Form 1120S.

The corporation filed Form 940 (Employer’s Annual Federal Unemployment (FUTA) Tax Return) and Forms 941 (Employer’s Quarterly Federal Tax Return) and paid employment taxes on wages paid to each employee except Mr. Singer (the corporation did not report paying wages to Mr. Singer during 2010 or 2011).

On audit, IRS determined that Mr.  Singer was an employee of the corporation for 2010 and 2011 and that the $181,872 in payments the corporation made on his behalf constituted wages that should have been subject to employment taxes. Mr. Singer did not object to being classified as an employee of the corporation, but contended that the advances that he made to the corporation were loans and that the payments the corporation made on his behalf represented repayments of those loans. IRS, on the other hand, argued that the funds advanced to the corporation were contributions to capital.

Tax Court’s decision. , that his intention was reasonable for a substantial portion of the advances, and that the corporation’s repayments of those loans were valid and should not be characterized as wages subject to employment taxes.

The Court said that there were a number of factors involved when evaluating the nature of transfers of funds to closely held corporations. It believed that the ultimate question was whether there was a genuine intention to create a debt, with a reasonable expectation of repayment, and whether that intention comported with the economic reality of creating a debtor-creditor relationship. If there was a genuine intention to create a debt, the corporation’s payment of Mr. Singer’s personal expenses could be considered as partial repayment of Mr. Singer’s loans rather than as wage income.

The Court noted that the corporation consistently reported the advances as loans on its general ledgers and on Forms 1120S. The corporation also consistently reported the expenses it was paying on behalf of Mr. Singer as a repayment of shareholder loans rather than reporting the payments as deductible business expenses. The Court said this indicated that Mr. Singer and the corporation intended to form a debtor-creditor relationship and that the corporation conformed to that intention. In addition, the Court pointed out that the corporation’s payments on behalf of Mr. Singer were consistent regardless of the value of the services Mr. Singer provided to the corporation.

Many of the payments the corporation made were for Mr. Singer’s recurring monthly expenses, including home mortgage and personal vehicle loan payments. The consistency of these payments, both in time and in amount, was characteristic of a debt repayment. Furthermore, the fact that the corporation made payments when it was operating at a loss strongly suggested that a debtor-creditor relationship existed: a creditor expects repayment of principal and compensation for the use of money, while an investor understands that any return of his investment depend on the success of the business.

The Court also said that Mr. Singer had a reasonable expectation of repayment of the advances when he first advanced funds to the corporation between 2006-2008. At that time, the business was well-established and successful. The Court believed that because the corporation was operating profitably and showed signs of growth, Mr. Singer was reasonable in assuming his loans would be repaid and that such intention comported with the economic reality of creating a debtor-creditor relationship.

The Court, however, did not believe Mr. that Singer had a reasonable expectation that the loans he made after 2008 would be repaid as the corporation’s business had dropped off sharply. It therefore concluded that the advances made in 2008 and earlier were bona fide loans and that advances made after 2008 were capital contributions.

Take away ..This is just another case in which the IRS has focused on the factors that a closely held corporation must follow to avoid  officers compensation on personal expenses and loans incurred by the corporation shareholders.   

Be careful to document all your actions and confirm your expectations as to the treatment of these items in your corporation  minutes. 


May. 17.

Indiana CPA Society nominates William F. Murphy for the Sidney Kess Award for Excellence in Continuing Education

February 19, 2016

Steering Committee for the AICPA Conference on Tax Strategies


1455 Pennsylvania Avenue, NW

10th Floor

Washington, DC  20004-1081


It is with great pleasure that the Indiana CPA Society nominates William F. Murphy for the Sidney Kess Award for Excellence in Continuing Education. Bill has extensive experience providing consulting and financial planning services to corporations and professional practices in Indiana. He is currently on staff at Mallor Grodner LLP law firm in Indianapolis. In this position, Bill provides valuation and financial analysis services focused in the areas of business transactions and valuations, matrimonial law, wealth preservation, and estate planning matters.

Bill is a CPA (Indiana License number CP18548448, active status since 10/3/1977) with credentials from the AICPA, including Personal Financial Specialist (PFS), Accredited in Business Valuation (ABV), and Certified in Financial Forensics (CFF). He is also a Certified Valuation Analyst (CVA) with the National Association of Certified Valuation Analysts.

Bill is active in the AICPA and serves on several of its technical committees. He is also active with the INCPAS, where he has been a member since 1977 and also former chair of its Ethics Committee. In addition to his accounting activities, Bill holds an Indiana Insurance License.  Bill presents annually for INCPAS as well as across the country for the AICPA. He teaches a wide-variety of tax related topics, including Social Security, healthcare, payroll taxes, and federal tax updates. Many of Bill’s evaluations include comments such as “I enjoyed the speaker. I have had him before and he is good at keeping the class engaged. Lots to talk about in this class and I felt we were able to get through a lot of the relevant items” and “Bill Murphy is the best! Excellent as usual.” His average ratings, based on a 5.0 scale, are usually a 4.5.

Bill has appeared as an expert witness in numerous cases involving marital and business disputes. His willingness to collaborate with others has led to regular lectures on valuation and tax issues for the National Business Institute, Western CPE, Indiana Continuing Legal Education Forum, and the National Association of Certified Valuation Analysts, as well as INCPAS and the AICPA.

He is a contributing writer to many national and local media outlets on tax and valuation topics.

Bill is very generous with his time, often presenting to small Indiana organizations that cannot afford his honorarium, such as the Accounting and Financial Women’s Alliance of Marion, Indiana, Chapter 108.

Bill’s integrity extends beyond the profession. His professional memberships include the National Association of Valuation Analysts Institute of Business Appraisers, Indianapolis Symphony Orchestra Planned Giving Committee Board of Advisors, Downtown Kiwanis Club of Indianapolis and the Butler University-Board of Visitors for the School of Business. Additionally, Bill and his family are generous supporters of the Indianapolis Salvation Army by purchasing hats and gloves for children who receive coats during a local annual drive called “Coats for Kids” sponsored by a local television station. He also participates in stuffing Christmas stockings for Indiana soldiers currently serving overseas.

Bill’s passion is evident in his scores and comments. He is a dynamic and powerful communicator who possesses the gift of being able to make complex subjects, such as tax, understandable. He is a very humble and approachable person who loves to share his extensive knowledge with others. Because of this, the Indiana CPA Society feels confident the Steering Committee for the AICPA Conference on Tax Strategies will agree that Bill Murphy is the most deserving candidate for this award.


Gary M. Bolinger, CAE

President & CEO

Indiana CPA Society