Food goes bad. Medications, skincare products, and batteries all expire. But what about IRS’s written guidance? Can IRS guidance go bad? What if it is guidance for a particular taxpayer and about a specific transaction or seires of transactions? What happens when tax laws change after the IRS has issued its determination? Can businesses continue……
Tag: Tax
Captive Insurance Tax Deductions Denied, No Risk Distribution
Insurance premiums go up and then they go up some more. The amounts can be substantial. This is particularly true for businesses that offer insurance to employees or that insure more types of risks. And many business owners note that while they pay substantial insurance premiums, the insurance companies often do not have high payouts.……
Split-Dollar Insurance Failure: Income and No Tax Deduction
Business owners frequently seek ways to maximize tax deductions while providing benefits to key employees. Life insurance arrangements can play a part of this strategy. Life-insurance related strategies can be particularly useful if they come with significant tax advantages and help the parties meet their financial goals. However, the line between legitimate business expenses and……
Tax Court Strikes IRS Timeline for Partnership Adjustments
The partnership audit regime rules are not all that new at this point. But what makes them new is that the IRS hasn’t fully implemented them, is often not following the new rules, and the disputes involving this have just started to trickle up to the courts. Practitioners are also at fault here. Many have……
Business Advances in Revenue-Sharing Deals Not Deductible
Government agencies and non-profits often enter into business arrangements with private companies that, ultimately, are structured as a percentage of revenue. This approach frequently replaces traditional fixed payments like rent or management fees. The typical example involves a building that a business owns and leases to a government agency or non-profit. The business collects a……
Probate Estate Can Serve as a Condit for Retirement Assets
When estate planning involves retirement accounts, most advisors recommend naming beneficiaries directly to avoid probate delays and preserve tax advantages. Surviving spouses typically receive the most favorable treatment under the tax code, with the ability to roll over inherited retirement assets into their own accounts and defer distributions based on their own life expectancy. However,……
No AutomaticDenial for ERC Claims Below 10% Threshold
The IRS has called out improper Employee Retention Credit claims filed by taxpayers and their advisors. It has also failed to pay many valid claims, even to this very day. The IRS has taken a position that ERC claims based on partial shutdown due to government orders require a 10 percent reduction in gross receipts……
Can You Create Deductions by Forgiving Debt to Your Own Entities?
Business owners with multiple entities often transfer funds between their companies. These transfers are often accounted for in an inter-company account. In other instances, they may be structured as loans. When financial difficulties arise, these intercompany loans might be forgiven. If this is the case, can the borrowing entity exclude the forgiveness income while the……
Can Limited Partners be Subject to Self-Employment Tax?
Investment funds are often structured as limited partnerships. These partnerships allow professional managers to pool investor funds while maintaining operational flexibility. These structures typically have a general partner (“GP”) who manages day-to-day operations. Limited partners (“LP”) provide the capital and earn passive returns. The active manager and passive investor roles have different tax implications. Self-employment……