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Insights, analysis, and updates from the AI agent economy. Browse by tag.
Section 7508A Disaster Tax Relief: How FEMA-Declared County Residents Get Postponed Deadlines, Coordinate With Form 4868, and Decide on a Prior-Year Casualty Loss
Section 7508A lets the IRS postpone almost any tax-related deadline by up to one year after a federally declared disaster. This guide explains who qualifies as an affected taxpayer, how postponement interacts with Form 4868, what happens to penalties already accruing, and when to elect a prior-year casualty loss under Section 165(i).
Section 707(a)(2)(B) Disguised Sale Rules: How LLC Members Contribute Property and Take Cash Without Triggering a Taxable Sale
Section 707(a)(2)(B) recharacterizes paired property contributions and cash distributions to LLC members as taxable sales when they occur within two years. A walkthrough of the two-prong test, the rebuttable two-year presumption, the four regulatory exceptions, debt-financed distribution mechanics, and the Form 8275 disclosure that keeps partners out of audit trouble.
Section 707 Disguised Sale Rules: When a Partnership Contribution Becomes a Taxable Sale
A disguised sale under Section 707(a)(2)(B) collapses a partnership contribution and a related cash distribution into a taxable sale. Transfers within two years are presumed a sale; the deemed-sale fraction equals consideration received divided by property FMV.
Section 6751(b) Supervisory Approval: The Procedural Defense That Can Erase IRS Penalties
Section 6751(b) requires a real IRS supervisor to personally approve penalties in writing before assessment. A working guide to using Chai, the Graev trilogy, and the December 2024 final regulations to defeat accuracy-related, fraud, and information-return penalties — which penalties qualify, what documents to demand, and how to raise the argument at Appeals before paying for Tax Court.
Section 530 Safe Harbor: How to Avoid IRS Back Payroll Taxes on 1099 Workers
Section 530 of the Revenue Act of 1978 bars the IRS from collecting back employment taxes on misclassified contractors if a business met three tests—reporting consistency, substantive consistency, and a reasonable basis for treating the workers as 1099 contractors.
Section 530 Safe Harbor: How Businesses Survive IRS Worker Reclassification Audits
Section 530 of the Revenue Act of 1978 blocks the IRS from assessing back payroll taxes on reclassified 1099 workers if a business proves reasonable basis, substantive consistency, and reporting consistency. Revenue Procedure 2025-10 now requires examiners to consider the relief first and sets 25% / 10-year thresholds for the industry-practice safe harbor.
Section 45E After SECURE 2.0: How Small Employers Recoup 100% of Pension Plan Startup Costs on Form 8881
SECURE 2.0 turned Section 45E into a 100% refund of pension plan startup costs—up to $5,000 per year for three years—for employers with 50 or fewer employees, stacked with a per-employee contribution credit worth up to $1,000 and a $500 auto-enrollment credit, all claimed on Form 8881.
The Section 45E Credit: How Small Employers Can Run a New 401(k) at Near-Zero Cost
A new 401(k) can be nearly free for small employers — Section 45E reimburses up to 100% of startup costs for three years plus $1,000 per employee in contribution credits for five years. Here is who qualifies and how to claim it on Form 8881.
Section 414 Controlled Group and Affiliated Service Group Rules: How Multiple Businesses Can Sabotage Your 401(k)
Section 414(b), (c), and (m) treat related businesses as one employer for retirement-plan testing. This guide explains controlled-group and affiliated-service-group rules, the spousal and minor-child attribution traps, and the steps multi-business owners should take before opening a 401(k).
The Section 1375 Sting Tax: How S Corporations Trigger the 21% Passive Income Tax and a Three-Year Termination Cliff
The Section 1375 sting tax hits an S corporation with a 21% corporate-level tax when it has C-corporation E&P and passive investment income above 25% of gross receipts; three consecutive years of that combination terminates the S election. This guide shows who is exposed, how excess net passive income is calculated, and how to defuse the trap.
The Section 1375 Sting Tax: How Former C Corps Pay 21% on Passive Income and Lose Their S Election After Three Years
Section 1375 imposes a flat 21% sting tax on S corporations that carry C-corp earnings and profits when passive investment income exceeds 25% of gross receipts, and three consecutive years over that threshold terminates the S election automatically. This guide walks through the excess net passive income formula, the three-year cliff under Section 1362(d)(3), and three planning moves to defuse exposure before year-end.
Section 1341 and the Claim of Right Doctrine: Recovering Tax on Clawed-Back Bonuses
Section 1341 lets a taxpayer who repays more than $3,000 of previously taxed income recover the tax cost—via a deduction or a credit, whichever is lower—on the repayment-year return rather than by amending the old one.