If you’ve been around closely held businesses long enough, you know that a transfer of money between a business and its owner, or between two related businesses, is sometimes characterized by the parties as a loan (“related...more
6/23/2025
/ Appeals ,
Borrowers ,
Cancellation of Debt (COD) ,
Closely Held Businesses ,
Corporate Taxes ,
Creditors ,
Debt Collection ,
Debtors ,
Income Taxes ,
IRS ,
Loans ,
Related Parties ,
Statutory Interpretation ,
Tax Court ,
Tax Deductions
An Agency Under Siege -
The mission statement of the IRS reminds taxpayers that it is their responsibility to understand and meet their tax obligations, while it is the role of the IRS to “enforce the [tax] law with...more
6/11/2025
/ Corporate Taxes ,
Estate Tax ,
High Net-Worth ,
Income Taxes ,
Inflation Reduction Act (IRA) ,
Internal Revenue Code (IRC) ,
Investment ,
Investment Funds ,
Investment Management ,
IRS ,
Limited Partnerships ,
Partnerships ,
Private Equity ,
Self-Employment Tax ,
Statutory Interpretation ,
Tax Court ,
Tax Liability ,
U.S. Treasury
A parent will sometimes transfer money to a child to enable the child to make an investment that the child could not otherwise make on their own. For example, the child may have identified an attractive business opportunity...more
4/1/2025
/ Borrowers ,
Estate Tax ,
Fair Market Value ,
Gift Tax ,
Interest Rates ,
Internal Revenue Code (IRC) ,
Investment ,
IRS ,
Loans ,
Tax Court ,
Tax Liability ,
Tax Planning ,
Trusts
If you’ve worked with the owners of closely held businesses for even just a few years, you have realized they are only half joking when they complain about having the government as a partner. Consider how much federal, state,...more
1/28/2025
/ Business Entities ,
Business Ownership ,
Closely Held Businesses ,
Enforcement ,
Enforcement Actions ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Limited Liability Company (LLC) ,
Partnerships ,
Tax Court ,
Tax Liability ,
Tax Planning ,
Tax Returns ,
Withholding Tax
Earlier this year the IRS announced that, as part of its larger compliance efforts begun last fall under the Inflation Reduction Act, the agency’s stepped-up enforcement activity with respect to high wealth, high income...more
10/31/2024
/ Audits ,
Compliance ,
Debt Collection ,
Deficiency Notices ,
Documentation ,
Due Process ,
Inflation Reduction Act (IRA) ,
IRS ,
Overpayment ,
SCOTUS ,
Solicitor General ,
Statute of Limitations ,
Tax Appeals ,
Tax Court ,
Tax Debt ,
Tax Levy ,
Tax Liability ,
Tax Returns
An anonymous thinker, lost to history, is credited with having said that the unofficial motto of the IRS is, “We have what it takes to take what you have.” In some instances, the truth of the above statement is manifested in...more
5/30/2024
/ Alter Ego ,
Appeals ,
Audits ,
Bad Actors ,
Bank Accounts ,
Capital Gains ,
Deficiency Notices ,
Income Taxes ,
IRS ,
S-Corporation ,
Sole Proprietorship ,
Summary Judgment ,
Tax Avoidance ,
Tax Court ,
Tax Liability ,
Tax Liens
Assume that X and Y agree to the following: X will transfer ownership of Prop to Y, and Y will transfer cash to X.
What just happened? Obviously, X has sold Prop to Y. If the amount of cash that X receives is greater than...more
5/6/2024
/ Anti-Abuse Rule ,
Disguised Sales ,
Equity Partners ,
Financial Transactions ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investment ,
Investment Adviser ,
IRS ,
Limited Liability Company (LLC) ,
Membership Interest ,
Partnership Distributions ,
Partnership Interests ,
Partnerships ,
Promissory Notes ,
Suppliers ,
Tax Avoidance ,
Tax Court
Over the years, I have observed there is only one thing that a taxpayer fears more than being notified by the IRS that their income tax return for a particular taxable year has been selected for audit, and that is being...more
4/24/2024
/ Audits ,
Court of Federal Claims ,
Debt Collection ,
Deficiency Notices ,
Filing Deadlines ,
Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Lack of Jurisdiction ,
Petition for Writ of Certiorari ,
Redeterminations ,
SCOTUS ,
Tax Court ,
Tax Penalties ,
Tax Returns
Imagine the IRS notifies Taxpayer that they have an outstanding tax liability with respect to Tax Year, and that the agency intends to levy on Taxpayer’s property to collect the allegedly unpaid tax. Taxpayer challenges the...more
4/19/2024
/ Income Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Overpayment ,
Popular ,
Spouses ,
Tax Appeals ,
Tax Court ,
Tax Debt ,
Tax Levy ,
Tax Liability ,
Tax Refunds ,
Tax Returns
Depending upon what you read or, perhaps more accurately, depending upon how much you believe of what you read, you may be aware that many closely held businesses are concerned about their future.
Most of these survived...more
4/4/2024
/ Bad Actors ,
Business Closures ,
Business Ownership ,
Closely Held Businesses ,
CPAs ,
Duty to Act ,
Embezzlement ,
Employment Tax ,
Financial Distress ,
IRS ,
Responsible Party ,
Tax Court ,
Trust Fund Recovery Penalty (TFRP) ,
Trust Funds ,
Withholding Tax
Would you be surprised to learn that most shareholders of closely held corporations, and especially those with minority or merely passive interests, believe they cannot be held responsible for the tax obligations of their...more
2/15/2024
/ Closely Held Businesses ,
Corporate Taxes ,
Internal Revenue Code (IRC) ,
IRS ,
Limited Liability ,
Liquidation ,
Securities ,
Shareholders ,
Stock Purchase Agreement ,
Stock Sale Agreements ,
Stock Transfer ,
Tax Court ,
Tax Liability ,
Tax Shelters ,
Transferees
Many of us have encountered variations of the following scenario: a parent owns and operates a business; one or more of their children are employed in the business; as the children mature and become more experienced and...more
2/9/2024
/ Asset Purchase Agreements ,
Business Assets ,
Business Succession ,
Closely Held Businesses ,
Family Businesses ,
Gift Tax ,
Grantors ,
IRS ,
Limited Liability Company (LLC) ,
Non-Compete Agreements ,
S-Corporation ,
Shareholders ,
Stocks ,
Succession Planning ,
Tax Court
Heads I Win, . . . -
When closely held corporations that are under common control engage in any intercompany transaction, it is prudent for the corporations and their shareholders to ensure that the transaction is being...more
2/2/2024
/ Business Losses ,
Business Taxes ,
Capital Contributions ,
CFOs ,
Closely Held Businesses ,
Creditors ,
Debt ,
Earnings Reports ,
Fund Distribution ,
Intent ,
Intercompany Transactions ,
Investment ,
IRS ,
Loan Repayment Issues ,
Loans ,
Tax Court ,
Tax Returns ,
Taxable Distributions
Hope you had a good Thanksgiving Holiday. Some of us probably feel we ate or drank either too much or not enough, watched too much or not enough football, or spent too much time discussing politics and the state of the...more
11/29/2023
/ Business Income ,
C-Corporation ,
Consultants ,
Deferred Compensation ,
Directors ,
Employee Benefits ,
Family Businesses ,
Family Members ,
IRS ,
Marketing ,
Personal Liability ,
Rental Property ,
Residential Property Owners ,
Restructuring ,
Retirement Plan ,
S-Corporation ,
Sole Proprietorship ,
Tax Court ,
Tax Deductions ,
Tax Rates
Last week, the IRS announced “the start of a sweeping, historic effort to restore fairness in tax compliance by shifting more attention onto high-income earners, partnerships, large corporations and promoters abusing the...more
9/14/2023
/ Artificial Intelligence ,
Balance Sheets ,
Compliance ,
Highly Compensated Employees ,
Inflation Reduction Act (IRA) ,
IRS ,
Limited Partnerships ,
S-Corporation ,
Self Employed ,
Self-Employment Tax ,
Tax Court ,
Tax Debt ,
Tax Evasion ,
Tax Liability ,
Taxable Income ,
Wealth Tax
Do you feel as challenged as I do when someone asks you to explain the term “Bidenomics”? I know that it is predicated upon the imposition of higher taxes on businesses and their owners, which have not yet materialized....more
8/17/2023
/ Business Ownership ,
Buyers ,
Cancellation of Debt (COD) ,
Capital Gains ,
China ,
Debt ,
Fair Market Value ,
Federal Budget ,
Federal Taxes ,
Income Taxes ,
Insolvency ,
IRS ,
Limited Liability Company (LLC) ,
Recessions ,
S-Corporation ,
Startups ,
Tax Court ,
Third-Party
Death of a Parent-
In the context of a family-owned business, it is often the case that the matriarch or patriarch of the family is also the chief executive of the business. They may have founded the business, or they may...more
8/11/2023
/ Closely Held Businesses ,
Estate Planning ,
Estate Tax ,
Family Businesses ,
Heirs ,
Insolvency ,
Internal Revenue Code (IRC) ,
IRS ,
Spouses ,
Surviving Spouse ,
Tax Court ,
Tax Liability ,
Tax Liens ,
Tax Returns ,
Transfer Taxes ,
Trusts
Faulty Framework?
The question posed above is not intended to be rhetorical. Rather, it is one that the owners of a closely held business should consider thoroughly before transferring or committing any business assets to...more
8/4/2023
/ Charitable Donations ,
Charitable Organizations ,
Charitable Trusts ,
Closely Held Businesses ,
Fair Market Value ,
Family Businesses ,
For-Profit Corporations ,
IRS ,
Nonprofits ,
Public Charities ,
S-Corporation ,
Tax Court ,
Tax Deductions
Losses Weren’t Always Bad-
Most tax advisers are aware that, prior to the Tax Reform Act of 1986 (the “TRA”),[i] the Code placed few limitations on the ability of an individual taxpayer to use deductions from a particular...more
7/27/2023
/ Business Losses ,
Capital Contributions ,
Deficit Reduction ,
IRS ,
Limited Liability Company (LLC) ,
Membership Interest ,
Net Operating Losses ,
Non-Recourse Loans ,
Partnership Interests ,
Partnerships ,
Passive Losses ,
Promissory Notes ,
Tax Court ,
Tax Cuts and Jobs Act ,
Tax Deductions ,
Tax Losses ,
Tax Planning ,
Tax Reform
What Was Intended?
Transactions between commonly controlled, closely held businesses are often conducted in an informal manner. This is unfortunate because, in the absence of documentation, it is sometimes difficult to...more
7/20/2023
/ Bad Debt ,
Capital Assets ,
Capital Contributions ,
Closely Held Businesses ,
Creditors ,
Debt ,
Debtor-Creditor ,
Deductions ,
Equitable Contribution ,
Equity ,
Fair Market Value ,
Fund Transfers ,
Investment ,
IRS ,
Loans ,
Ownership Interest ,
Real Estate Development ,
S-Corporation ,
Secured Debt ,
Tax Court ,
Tax Liability ,
Tax Returns
Something’s Wrong-
Of late, a not insignificant number of the business owners with whom I’ve been working have raised some concern over whether they are financially prepared for the next stage of their lives.
...more
6/6/2023
/ Business Expenses ,
Business Ownership ,
CEOs ,
Compensation ,
Dividends ,
Interest Rates ,
Investors ,
IRS ,
Tax Court ,
Tax Liability ,
Tax Planning ,
Transfers
Hasta La Vista N.Y.-
Wealthy individuals continue to leave New York for tax friendlier jurisdictions.
Be Prepared-
Some of these taxpayers take a very methodical approach toward planning for their departure. They...more
5/18/2023
/ Administrative Law Judge (ALJ) ,
Audits ,
Capital Gains ,
Documentation ,
Domicile ,
Exit Tax ,
Income Taxes ,
Limited Liability Company (LLC) ,
Membership Interest ,
New York ,
Non-Resident Income Taxes ,
Purchase and Sale Agreements ,
Relocation ,
State Taxes ,
Tax Court ,
Taxation
At war with Russia in eastern Europe, a nascent competing world order, mass shootings and bank failures at home, questionable audit practices by the Big 4 . . . everywhere, debt ceilings and the risk of default, inflation,...more
5/12/2023
/ Capital Contributions ,
Capital Gains ,
Capital Investments ,
Fair Market Value ,
Future Profits ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investors ,
IRS ,
Limited Liability Company (LLC) ,
Liquidation ,
Partnership Interests ,
Partnerships ,
Profits Interests ,
Safe Harbors ,
Tax Court ,
Term Sheets
Charitable Giving Update-
According to a recent report on charitable giving, the number of donors at every level of giving dropped during the first three quarters of 2022. The number of new donors was down by over 19...more
5/3/2023
/ Articles of Incorporation ,
Bonuses ,
Burden of Proof ,
Capital Gains ,
Change in Control ,
Charitable Donations ,
Due Diligence ,
Gift Tax ,
IRS ,
Letters of Intent ,
Private Equity ,
Purchase Agreement ,
Registered Investment Advisors ,
Selling a Business ,
Shareholder Distributions ,
Stock Purchase Agreement ,
Tax Court ,
Tax Returns
Have you ever wondered whether you were barking up the wrong tree? That the solution to a problem may be found, not in the approach to which you were already committed and invested, but in an altogether different direction?...more
3/9/2023
/ Adjusted Gross Income ,
Business Expenses ,
Closely Held Businesses ,
Foreign Corporations ,
Income Taxes ,
IRS ,
Joe Biden ,
Partnerships ,
S-Corporation ,
Self Employed ,
Tax Court ,
Tax Evasion ,
Tax Increases ,
Wealth Tax ,
Wire Transfers