Tax Law Blog
This article discusses the application of Sections 280G and 4999 of the Internal Revenue Code and related treasury regulations (“IRC” or “Code”)[1], best practices, and alternative approaches to structuring and approving parachute payments in the context of a deferred compensation plan (“Plan”) for a privately held domestic company (“Company”)[2]. Assume a Plan such as a synthetic equity plan involving phantom stock to be paid in cash upon IRC 409A compliant payment events, substantially simplifying valuation issues noted below.
I. BACKGROUND
Section 280G ...
Certain payments constituting income require the payor to prepare, furnish, and file certain information statements and returns, both to the payee and to IRS, even when the payor is not the taxpayer whose income is being reported. These returns typically aid the recipient payee in calculating and reporting income in the relevant year and help IRS to identify unreported or underreported income by creating two potential sources of information, which should generally be consistent.
Most of the time, determining the appropriate 1099 or similar form is straightforward. Reporting ...
IRS has made a habit of challenging whether a member of a limited liability company that is treated as a partnership for tax purposes is materially participating in the activities of the partnership.
A recent Tax Court case (Strieby v. Commissioner) considers whether the passive activity credit limitation rules of Code Section 469 may prevent taxpayers from claiming energy credits allocated to them by virtue of their membership interests in a partnership.[1]
Facts Presented.
In Strieby, taxpayers invested in a solar farm but their only involvement consisted merely of completing ...
Brokers and their investor customers in digital assets should prepare, and tax professionals should prepare to assist, with reporting proceeds from certain digital asset transactions. See IRS FS-2025-06, Sept. 25, 2025.
The statements reflecting information reported on Form 1099-DA will differ from other information statements taxpayers receive because most of these statements will not provide basis information regarding a taxpayer’s digital asset transaction(s) for the 2025 tax year.
Taxpayers will need to calculate their basis before filing their 2025 tax return. For ...
On April 9, 2025, a Michigan man pleaded guilty to filing a false tax return for his international vehicle shipping business along with not paying taxes on cash wages he paid to his employees.[1]
According to court documents and statements, Ali Kassem Kain owned and operated a business called Specialized Overseas Shipping that arranged for vehicles to be shipped to West Africa and other destinations for third parties. For tax years 2017 through 2020, Kain underreported the company’s gross receipts by $6.4 million on the business’ tax returns. Kain also did not collect and pay over ...
Healthcare executives are advised to consider the significance of a ruling issued in 2024 by the Internal Revenue Service (IRS) which revoked the tax-exempt status of a non-profit organization. In Private Letter Ruling* 202437007, the IRS determined that a non-profit organization had failed the “operational test” and revoked its tax-exempt status.
The entity in question had indicated no charitable activities or related expenses, leading the IRS to conclude that the organization was not operating exclusively for tax-exempt purposes.
In early June, the Supreme Court issued an opinion that clarifies how company-owned life insurance impacts the value of the company for estate tax purposes. As a business owner, you may need to re-evaluate the use of those policies and whether they will subject you to increased estate tax exposure. Here’s what happened in Connelly and how it may affect you.
The short answer is that it depends, but it is usually advisable and sometimes required. Let’s dig deeper.
Initially, let’s discuss what a PPM is. A PPM is a document that discloses information regarding the company that is seeking to raise investment capital. In some ways, it is like a business plan, but with detailed additions for investment risk factors, securities law provisions, and the proposed terms of investment. PPMs go by a variety of names – including confidential information memorandums (CIMs) and offering memorandums.
On Friday February 12, the Maryland State Senate voted to override Maryland’s governor to pass a bill creating a tax on annual gross revenues derived from digital advertising services in Maryland. Maryland’s digital advertising tax is the first of its kind in the United States.
In a year that has forced many to be reactionary, tax planning offers an opportunity for business owners to be proactive about the health of their business as the end of 2020 draws near.
Attorney Michael Zahrt provides tax planning strategies for year end along with updates to the CARES Act and PPP Loans in the following short video:
The CARES Act created a number of new tax benefits that are available for one year only, and these benefits have largely been lost in the sea of various stimulus programs (and compliance with those programs).
For a more in depth look at tips for year end tax planning, visit the following article which summarizes a few tax opportunities available to your business before the end of 2020:
