Michigan Tax Law Articles, Blog & Documents | Foster Swift

A Short Guide to IRS Offers in Compromise (OIC)

Nicholas J. Stock II — Tue, 15 Sep 2026 09:00:01 -0400

Disclaimer: This summary states the federal law and relevant guidance regarding offers in compromise (OIC) as of the date of writing. It is designed to provide a practical overview but is not intended to be legal advice. Any tax controversy engagement, OIC or otherwise, requires careful review of the taxpayer’s transcripts, collection period, financial situation, filing history, levy and lien records, and facts bearing on liability or hardship, among other relevant facts and circumstances.

An offer in compromise is a contract under which the United States accepts less than the ...

Can Limited Partners Avoid Self-Employment Tax? What Fifth Circuit’s Decision Means for Business Owners

Michael C. Zahrt, Zachary W. Miller (Summer Associate) — Mon, 20 Jul 2026 09:00:02 -0400

Business owners who operate through partnerships or LLCs taxed as partnerships should take note: a recent Fifth Circuit Court of Appeals decision could significantly reduce the amount of self-employment tax certain partners owe.

Under long-standing tax law, partners generally pay self-employment (SECA) tax—currently 15.3%—on their share of business income. However, there is an important exception: the distributive share of income earned by a “limited partner” is typically not subject to SECA tax (although payments for services, called “guaranteed ...

How Much is “Too Much”? Understanding Reasonable Compensation for Business Owners

Michael C. Zahrt, Zachary W. Miller (Summer Associate) — Tue, 07 Jul 2026 09:00:03 -0400

For owners of closely held businesses, compensation planning is more than just a business decision—it’s a tax strategy that can invite IRS scrutiny and the recharacterization of compensation if not handled carefully.

Why Compensation Matters

The tax rules allow businesses to deduct “reasonable” compensation paid to employees, including owner-employees. But when compensation is considered too high, the IRS can reclassify the excess as a dividend. This creates a mixed result: the individual may benefit from lower dividend tax rates, but the company loses a valuable ...

Tax Folks Update: Golden Parachute Rules for Deferred Compensation Plans

Nicholas J. Stock II — Tue, 17 Mar 2026 09:00:04 -0400

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 ...

Understanding 1099 Reporting Obligations: Key FAQs for Corporations and Brokers

Nicholas J. Stock II — Tue, 17 Feb 2026 09:00:05 -0500

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 ...

Energy Credits Under Scrutiny: What Strieby Means for Investors and Partnerships

Nicholas J. Stock II, Michael C. Zahrt — Thu, 05 Feb 2026 09:00:06 -0500

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 ...

Tax Folks Update: Key Compliance Obligations for Brokers and Taxpayers Under Form 1099-DA

Nicholas J. Stock II — Fri, 30 Jan 2026 09:00:07 -0500

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 ...