The IRS has begun applying automatic penalties to late-filed Form 5472's. We knew that since 2009 the IRS has automatically assessed a $10,000 penalty for late-filed Forms 5471's - Information Return of US Persons With Respect to Certain Foreign Corporations. However, we have been receiving a lot of calls from businesses who have recently received penalty…
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S Corporation Shareholder Compensation – How Much Is Reasonable?
A shareholder-employee’s compensation from an S corporation is often subject to IRS scrutiny because S corporation flow-through income enjoys an employment tax advantage over that of sole proprietorships, partnerships and LLCs. This advantage finds its genesis in Revenue Ruling 59-221, which held that a shareholder’s undistributed share of S corporation income is not treated as self-employment…
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When You Need a Tax Attorney not a tax resolution firm?
Reprint of Blog Post - AnthonyParent: This is a true story: In 2011, “Steve,” a taxpayer in New York City, is in serious trouble with the IRS. He searches the internet for an “IRS tax attorney.” He makes the mistake of believing a tax resolution firm in California are attorneys (because they claim to be).…
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Stat Notice or Form 870?
We are closing the appeal of an audit that's been ongoing for several years. The issue is that the income of a Foreign Corporation, owned by the taxpayer's foreign relative, is being attributed to the US taxpayer for the year 2010. This foreign Corporation had a large gain from the sale of an asset in…
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