IRS proposes removing filing requirement for small business ordinary loss claim. (Brief Article)

In a move to eliminate the paperwork burden for small businesses, the Internal Revenue Service has proposed removing the requirement of filing an extra information statement when claiming an ordinary loss on small business stock.

Under existing regulations, a taxpayer claiming an ordinary loss on small business stock must file an information statement with the return for the year the loss occurs. Proposed rulemaking (CO-46-94) would permit an individual to treat a limited amount of loss on Internal Revenue Code section 1244 stock as ordinary loss. A taxpayer still would bear the burden of proof that the deduction is proper. but the IRS and the Treasury have determined …