S Corporation SE Avoidance Still A Solid Strategy
Despite court losses and the lack of any discernible policy justification, it appears that the S Corporation SE tax avoidance strategy is still solid. Small business owners should examine the implication carefully, though, before jumping into it.
Whistleblowing Can Be A Business
The court went through a “hobby loss” type analysis to determine whether Mr. Bagley was engaged in a trade or business. He passed most of those tests – profit motive, acting in a business-like manner, expertise, time and effort – with flying colors. He even convinced the Court he was not enjoying himself, although this does seem like a situation fraught with the potential for schadenfreude.
Follow Me
Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.