Client has many speaking events and has income as a result. The speaking events are related to marketing subjects. Does client qualify for SSTB under the IRS regulations
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These are the categories, so which category do you think MIGHT apply?
Health,
law,
accounting,
actuarial science,
performing arts,
consulting,
athletics,
financial services,
investing and investment management,
trading,
dealing in certain assets or
any trade or business where the principal asset is the reputation or skill of one or more of its employees
Then look at the prologue to the Final Regulations to read what it says about that category. The first one ("health") starts on page 76:
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"any trade or business where the principal asset is the reputation or skill of one or more of its employees"
Would this include the A/C & Heater repairman in a small town, where he is the only one available?
What about a Plumber, Electrician, etc. that are known about the quality of work in a small town where there are two or more of these same firms?
Jiggers, EAComment
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Originally posted by Jiggers View Post
No. From the link above from the Final Regulations:
Accordingly, the final regulations retain the proposed rule limiting the meaning of the reputation or skill clause to fact patterns in which an individual or RPE is engaged in the trade or business of receiving income from endorsements, the licensing of an individual’s likeness or features, and appearance fees.Comment
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I think the speaker's activities will constitute an SSTB pursuant to the reputation or skill regulations. Reg. Section 1.199A-5(b)(2)(xiv)(C) "Receiving fees, compensation, or other income for appearing at an event or on radio, television, or another media format."Originally posted by Florida_EA View Post
If your client is being paid to appear and speak, I believe he/she meets the definition above.
Comment
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Originally posted by ttbtaxes View Post
While I see your point, I don't think that is necessarily the case. If you read the context and the examples, it seems to apply if the person is "well-known" (the examples use a "well-known chef" and "well-known actor".
So I interpret it as if people are going to the speaking event for the information but have no idea who he is, it is not a SSTB. If people are going to the even because they have 'heard' of him and because HE is speaking, then it would be a SSTB.
At least that is how I interpret it.Comment
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On page 98 of the final regulations release, they discussed their thoughts about this issue by saying, "Accordingly, the final regulations retain the proposed rule limiting the meaning of the reputation or skill clause to fact patterns in which an individual or RPE is engaged in the trade or business of receiving income from endorsements, the licensing of an individual’s likeness or features, and appearance fees."
Maybe we're back to the question about whether the speaker's activity is regular, frequent, and continuous and constitutes a trade or business. If the person can make a living, or partial living, from revenues which flow from speaking engagements, it seems to me that he has established his reputation as an expert on some level. Certainly enough so that people are willing to pay to listen to him.
If that were my client, given the increased penalty associated with claiming the QBID, I'd err on the side of being conservative.Comment
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