TOP SECRET: HOW TO APPLY D.C. COMBINED REPORTING TO UNINCORPORATED BUSINESSES
Get out your magnifying glass, metal detector, stud finder, GPS, and any other detecting equipment. Figuring out how to keep an unincorporated business in compliance with the combined reporting regime in the District of Columbia may take all of those and more. The D.C. Council and the Office of Tax and Revenue (OTR) have provided guidance through statutes and regulations, schedules, articles, and notices, yet taxpayers and tax practitioners are still struggling to apply the rules.
Taxpayers are concerned about taking positions on current returns that the OTR may later disagree with on audit. Taxpayers are used to interpreting and applying state tax laws that may not be clear, but in this case, the level of certainty when trying to apply the rules is closer to 50 percent. Because the D.C. combined reporting regime is only two years old, there is no precedent or standard to help taxpayers interpret vague rules to meet a more likely than not standard.
To read more, check out my article in Tax Analysts State Tax Notes on October 14, 2013 . (the link to the article is in my LinkedIn profile)