A corporation owned by 3 shareholders in the restaurant industry opted to deduct FICA taxes on tips to employees instead of claiming a tax credit. One of the corporation’s shareholders tried to reverse this choice by claiming his share of potential credits on his return. The Tax Court said he can’t unilaterally decide to revoke the election to deduct the taxes rather the election is a corporate decision and a single shareholder can’t undo it.
New blog post today! Growing Fast: Risks and Rewards for Small Business Owners