#irs-requirements
Irs Requirements
Meet IRS requirements for business tax compliance
A Payroll Company Stole $20 Million in Withheld Taxes. The IRS Still Came After the Clients.
Elite Payroll's owner kept $22 million in client payroll taxes over eight years — and the IRS can still hold the defrauded clients personally liable via the Trust Fund Recovery Penalty (IRC §6672). How the TFRP works, why an LLC won't shield you, and four concrete ways to verify your payroll provider is actually remitting, including independent EFTPS enrollment and quarterly Form 941 reconciliation.
The IRS Just Added Three Features to Business Tax Account — Here's Why Small Business Owners Should Care
The IRS's summer 2026 Business Tax Account update adds a digital notices library, self-service EIN verification letter (CP575) downloads, and online Offer in Compromise payments. Here's who qualifies, how setup works, and why disciplined bookkeeping makes these tools actually useful.
The Enrolled Agent Exam's 2026 Overhaul: PSI Replaces Prometric, and the Total Cost Rises to $317 Per Part
The IRS cut its Enrolled Agent exam fee from $99 to $66 per part in 2026, but new vendor PSI charges $251 versus Prometric's $168 — raising the total to $317 per part. The switch also brings a March–June testing blackout, a 200–800 scoring scale, and first-time remote proctoring for U.S. candidates.
Dougherty Electric v. United States: How the Variance Doctrine Killed Half of a $1.5 Million Tax Refund Claim
On July 15, 2026, the Federal Circuit ruled in Dougherty Electric v. United States that one refund theory survived and one died — not on the merits, but on whether each was raised in the company's 2017 administrative claim. A guide to the variance doctrine, restitution-based assessments under IRC 6201(a)(4), and why every refund claim should list every legal theory before the IRC 6511 deadline.
How to Get the IRS to Answer You in Writing: Private Letter Rulings and Determination Letters for Small Businesses
Oral advice from the IRS is not binding — a private letter ruling is. Under Revenue Procedure 2026-1, 9100 relief for a missed tax election generally costs about $14,500, with reduced tiers near $3,450 and $9,775 for smaller organizations, and the IRS must make contact within 21 days of a complete request. Here's when a ruling is worth the fee, what the request must contain, and the no-fee alternatives — Form SS-8, Form 3115, and Rev. Proc. 2013-30 — that cover most common cases.
Safe Harbor 401(k) Plans in 2026: How Small Businesses Skip Nondiscrimination Testing
A safe harbor 401(k) automatically passes IRS ADP/ACP nondiscrimination testing in exchange for a fixed employer contribution — a 3% nonelective or a match of up to 4%. Here's how the three formulas compare in cost, the December 1 retroactive adoption deadline, and the 2026 limits ($24,500 deferral, $72,000 total additions, mandatory Roth catch-ups for high earners).
Besicorp v. Commissioner: Why the IRS Couldn't Collect a $380 Million Penalty — and What a CDP Hearing Can Do for Your Business
In Besicorp Group v. Commissioner (June 29, 2026), the Second Circuit blocked IRS lien-and-levy collection of $380 million in tax-shelter penalties because the Appeals Officer never verified written supervisory approval under IRC § 6751(b) — even though the penalties were already final after Tax Court. Here is how the Collection Due Process hearing works, what the ruling does and doesn't change, and the five steps a small business should take after a lien or levy notice.
Tooke v. Commissioner: Why the IRS Can Say No to Your 'Reasonable' Monthly Payment
In Tooke v. Commissioner (June 2026), the Tax Court upheld the IRS's rejection of an offer in compromise that fell below the taxpayer's Reasonable Collection Potential — disallowing a speculative $85,000 medical reserve, $1,000/month in duplicative tutoring costs, and $550/month in excess transportation. What the ruling teaches about documenting household budgets for OICs and partial-pay installment agreements.
Owner's Draw vs. Salary: How S-Corp Owners Set Reasonable Compensation
The "60/40 rule" for splitting S-corp salary and distributions has never appeared in any IRS regulation. What the IRS actually applies is a facts-and-circumstances test — the one that reclassified a CPA's $24,000 salary to $91,044 and cost him $23,000 in back payroll taxes. Here's how to set a defensible number.
Form 8275 Disclosure Statement: Defeating the 20% Section 6662 Accuracy-Related Penalty
Form 8275 lets taxpayers disclose debatable tax positions with the IRS to defeat the 20% Section 6662 accuracy-related penalty when a position has at least a reasonable basis. Covers when to use Form 8275 versus Form 8275-R, what counts as adequate disclosure, timing rules, and Section 6694 preparer-penalty protection.
After ERC Voluntary Disclosure Program 2.0: How Small Businesses Can Still Fix Improper Claims in 2026
With the second ERC Voluntary Disclosure Program closed since November 2024, small businesses with overstated Employee Retention Credit claims still have three remedies in 2026: claim withdrawal, self-amendment via Form 941-X, or responding to an IRS recapture letter. The IRS has a six-year audit window open through April 15, 2027 for Q3 and Q4 2021 claims, plus a 20% accuracy-related penalty for erroneous refunds.
Section 531 Accumulated Earnings Tax: Justifying C-Corp Retained Earnings Above the $250,000 Bright Line
Section 531 imposes a 20% accumulated earnings tax on C-corps that retain profits beyond a $250,000 credit ($150,000 for personal service firms) without specific, feasible plans. This guide explains the Bardahl working-capital formula, the Section 534 burden-of-proof statement, and the contemporaneous documentation that defends an accumulation in IRS audit.