IRS FAQs on Section 199A: Nasty? Helpful? Wrong?

On April 11, the IRS posted its updated Section 199A Frequently Asked Questions (FAQs).

These FAQs were intended to provide helpful information for taxpayers, but instead, they will cause a lot of confusion and grief.

Why? Because following the confusing advice of three of the FAQs will ultimately force some taxpayers to file amended tax returns!

What’s going on? We’ll give you all the facts and explain how to stay out of trouble when you read my new article titled Tax Tips: IRS FAQs on Section 199A: Nasty? Helpful? Wrong?

Three ways our fact-filled article can help you:

1. You’ll learn what could blindside tax preparers. If they relied on the proposed regulations to avoid Qualified Business Income (QBI) adjustments for various deductions (as mentioned in an FAQ), they might have to amend those returns. Ouch! You’ll get the whole story when you read the full article.
2. We’ll explain problems with the partnership FAQ. The IRS suggests that unreimbursed partnership expenses and business interest expenses reduce QBI in some, if not all, circumstances. This can pose a real problem. We’ll give you all the details when youread the full article.
3. We’ll tell you why FAQ #33 is so troublesome. It seems to be calling for the more than 2-percent S corporation owner to subtract his or her self-employment health insurance from QBI twice. If that turns out to be the rule, you’ll have to amend your return. All will be explained when you read the full article.