Don Farmer's Top 10 S Corporation Return Issues & How to Avoid Them
2.00 Credits
Member Price $89
Non-Member Price $109
Overview
S corporation tax returns present recurring technical and compliance challenges that can expose shareholders and practitioners to costly errors. From basis limitations and shareholder distributions to reasonable compensation and built-in gains tax, small missteps can result in significant tax adjustments, penalties, and IRS scrutiny.
This focused 2-hour program examines the ten most common S corporation return issues encountered by practitioners and provides practical guidance on how to identify, prevent, and correct them. Participants will review shareholder basis calculations, loss limitations, compensation requirements, eligibility rules, and reporting pitfalls frequently identified during IRS examinations.
Through real-world examples and case-based discussion, attendees will gain actionable strategies to improve accuracy, strengthen documentation, and reduce audit risk in S corporation engagements.
Highlights
Overview of S Corporation Compliance Framework
- Eligibility requirements under IRC §1361
- One class of stock rule
- Shareholder limitations
- Election considerations and termination risks
Top 10 common S Corporation Return Issues:
- Failure to Properly Track Shareholder Basis
- Improper Deduction of Losses Without Sufficient Basis
- Distributions in Excess of Basis
- Inadequate Reasonable Compensation
- Shareholder Loans Misclassified or Poorly Documented
- Built-In Gains (BIG) Tax Issues
- Passive Investment Income and Termination Risk
- Improper Allocation of Income and Expenses
- Fringe Benefits and Shareholder-Employee Issues
- 1State Tax and Composite Filing Oversights
Prerequisites
None
Designed For
CPAs and tax professionals involved in the world of tax.
Objectives
- Identify common technical and reporting errors on S corporation tax returns.
- Calculate shareholder stock and debt basis and determine the impact on loss deductions and distributions.
- Recognize reasonable compensation requirements and related payroll compliance risks.
- Determine eligibility and operational requirements necessary to maintain S corporation status.
- Apply best practices to reduce audit exposure and improve return accuracy.
Preparation
None
Leader(s):
Leader Bios
Nicholas Preusch
Nicholas Preusch, CPA, JD, LLM, is a tax manager with PBMares, LLP, in Fredericksburg, VA, where he works with high wealth individuals and mid- to large-size companies focusing on tax controversy and complex tax issues. In addition, Nicholas is an adjunct professor at the University of Mary Washington. Nicholas has been published in the AICPA’s Journal of Accountancy and Tax Adviser, and in CCH’s Journal of Tax Practice and Procedure. He co-authored the textbook Tax Preparer Penalties and Circular 230 Enforcement, published by Thomson Reuters. Nicholas was named one of the VSCPA’s Top 5 Under 35 in 2017. Prior to joining private practice, Nicholas started his career as an IRS Revenue Agent. He later joined the IRS Office of Professional Responsibility as an enforcement attorney. While at OPR, he was the lead attorney on several milestone cases such as Gass and Pezzo. Nicholas is a graduate of Carthage College, degree in Accounting and Business; he has also earned a Master of Science in Accounting from the University of Connecticut, his JD from Case Western Reserve University, and his LLM in Taxation from Georgetown University.
Non-Member Price $109
Member Price $89