Given the new lower tax rate of 21% for C corporations, many businesses are considering switching business forms. What is one major difference between operating as a C corporation compared to other entities that should be considered before switching to the corporate form?

1. No limited liability benefit.
2. Limited meals and entertainment deduction.
3. Second level of tax on dividends.
4. Strict limits on number of owners.

Which of the following statements is false?

1. A C corporation's E&P for a taxable year is calculated without regard to any disallowance of interest expense under IRC Sec. 163(j).
2. A C corporation with disallowed interest expense for a particular year calculates its current E&P by subtracting its total interest expense for the year, including the disallowed interest expense.
3. A corporation's subsequent deduction of its disallowed interest expense in a later year is not taken into account in calculating its E&P for that later year.
4. All interest expense (both allowed and disallowed under Sec. 163(j)) should be excluded from a C corporation's E&P.

In order to be subject to the new corporate book minimum tax enacted by the Inflation Reduction Act (IRA), a C corporation must have average annual adjusted financial statement income (AFSI) greater than:

1. $1 billion.
2. $500 million.
3. $100 million.
4. $750 million.

All of the following are lessons to be learned from Hacker v. Comm., TCM 2022-16, except:

1. Taxpayers are required to pay reasonable salaries and wages for the services they perform for their own corporations.
2. Creating an asset account on the balance sheet for loans to a shareholder instead of treating personal expenses properly as a dividend (for C corporations) or a distribution (for S corporations, partnerships, and LLCs taxed as S corporations or partnerships) doesn't meet recordkeeping and compensation requirements.
3. Client's financial statements are the responsibility of their bookkeeper or paid preparer.
4. Failing to maintain proper records, track expenses, and pay reasonable compensation will put a client at high risk for a reasonable compensation audit.