99 tagged with "Legal"
Legal considerations for business finance and accounting compliance
Section 409A: Structuring Bonuses, Severance, and Phantom Equity to Avoid the 20% Penalty
Section 409A taxes noncompliant deferred compensation in the year of vesting and adds a flat 20% federal penalty plus interest. This guide explains the short-term deferral and separation pay exceptions, the six recognized payout triggers, the six-month delay for specified employees, and how to structure bonuses, severance, RSUs, phantom stock, and discounted stock options so founders avoid the penalty.
How to Use the Tax Court Small Case Procedure (Section 7463) to Dispute IRS Bills Under $50,000
Section 7463 lets a taxpayer challenge an IRS deficiency of $50,000 or less in U.S. Tax Court without a lawyer for a $60 filing fee, using a simplified Form 2 petition and informal trial — in exchange for giving up the right to appeal and the ability to set precedent.
Form 911: Escalating Stalled Refunds, Wrongful Levies, and Identity Theft to the Taxpayer Advocate Service
Form 911 opens the door to the Taxpayer Advocate Service, an independent IRS office that intervenes in stalled refunds, wrongful levies, and identity-theft cases under IRC Section 7811. This guide explains the four hardship categories, how to file, and what to write so a case gets expedited rather than queued.
IOLTA and Client Trust Accounting: Three-Way Reconciliation, Earned vs. Unearned Fees, and the Mistakes That End Careers
How law firms run IOLTA accounts under ABA Model Rule 1.15 — separating earned from unearned fees, matching the bank statement to the master ledger and per-client sub-ledgers in a three-way reconciliation, and avoiding the four commingling mistakes (firm money in trust, firm expenses from trust, earned fees left in trust, one client's funds covering another's disbursement) that drive most bar discipline cases.
The Three-Way Reconciliation: How Law Firms Keep Client Trust Money Separate and Stay Off the Disciplinary Docket
A three-way reconciliation ties the bank statement, the trust ledger, and the sum of every client sub-ledger into one agreeing number. This guide explains how it works, how to keep earned and unearned fees separate, and which bookkeeping mistakes quietly build into a bar disciplinary complaint.
Soroban v. Commissioner: How 'Limited Partner' Stopped Meaning Limited Partner for SE Tax
The Tax Court's 2025 Soroban v. Commissioner ruling applied a functional test to Section 1402(a)(13), reclassifying tens of millions in distributive share as self-employment income for working partners in hedge funds, private equity, and professional service LPs.
DOL Independent Contractor Final Rule: The Six-Factor Economic Realities Test and What Small Businesses Must Document in 2026
The 2024 DOL Independent Contractor Final Rule and its six-factor economic realities test still govern FLSA worker classification in private lawsuits despite the May 2025 enforcement pause. Small businesses that misclassify employees face back wages of two to three years, liquidated damages, civil penalties above $2,300 per violation, and IRS payroll tax exposure—risks that clean bookkeeping and contemporaneous documentation are built to defend against.
First-Party vs. Third-Party Special Needs Trusts: SSI, Medicaid, and the Payback Rule
How first-party (d)(4)(A) and third-party special needs trusts differ — funding sources, the Medicaid payback rule, sole-benefit constraints, the 2024 ISM food change, and the 2026 ABLE age expansion — for families protecting a disabled beneficiary's SSI and Medicaid eligibility.
Regulation D Rule 506(b) vs Rule 506(c): How Founders Pick Between the Quiet Round and the Public Pitch in 2026
Rule 506(b) and Rule 506(c) of Regulation D both allow uncapped private placements but differ sharply on marketing and verification. 506(b) bans general solicitation and permits up to 35 sophisticated non-accredited investors on a reasonable-belief standard; 506(c) permits public solicitation but requires reasonable steps to verify every purchaser is accredited. A March 2025 SEC no-action letter lets issuers rely on $200,000+ individual or $1 million+ entity minimum checks as the primary verification step.
SEC Cybersecurity Incident Disclosure: Hitting the Four-Business-Day Clock on Item 1.05 in 2026
A 2026 operating guide to SEC Item 1.05 Form 8-K cybersecurity disclosure — when the four-business-day clock starts, how to make the materiality call without unreasonable delay, when the Attorney General can grant a delay, the Item 1.05 vs. Item 8.01 trap, and what Regulation S-K Item 106 requires in your annual 10-K.
Innocent Spouse Relief: How Form 8857 Unwinds Joint Tax Liability After Divorce
Form 8857 lets a spouse seek relief from joint tax liability under IRC Section 6015. This guide walks through the two-year deadline, the three relief categories—traditional, separation, and equitable—and how divorced, separated, or abused taxpayers build a record that survives IRS and Tax Court review.
Innocent Spouse Relief: A Guide to Form 8857 and Section 6015
Innocent spouse relief under IRC Section 6015 lets divorced or separated taxpayers escape joint liability for a spouse's tax misconduct via Form 8857. This guide covers the three types of relief—traditional, separation of liability, and equitable—plus deadlines, evidence requirements, and the common reasons the IRS denies claims.