by Boris Benic | Jul 7, 2026 | Blog
A lower IRS audit rate is not much comfort if your return is the one that gets flagged because the income, deductions, or reported amounts do not match what the IRS has on file.
Kiplinger.com recently reported that individual IRS audit rates have been “significantly below 1%” in recent years and are expected to keep declining, at least for now. But fewer audits does not mean looser standards. With funding and workforce cuts limiting capacity, the IRS is expected to use data analytics and artificial intelligence to focus more selectively on returns that appear higher-risk.
Match the Return to the Paper Trail
The IRS does not need to audit every return to find problems. A missing 1099, a K-1, business income that does not line up with the books, or a deduction that looks out of place can still create questions. Sometimes the result is not a full audit. It may be a notice asking why information the IRS received from someone else does not match what was reported on the return.
Before filing, check the return against the paperwork the IRS may already have: W-2s, 1099s, K-1s, brokerage statements, payment app reports, retirement forms, and anything else reporting income or payments under your name or your business. If the return says one thing and the outside paperwork says another, do not assume it will go unnoticed.
The same idea applies to returns with business income, investment activity, rental property, refundable credits, digital assets, foreign reporting, or large deductions. None of those items is wrong by itself. But if the support is thin, the math is rough, or the explanation changes every time someone asks, you may have a problem.
Clean Does Not Mean Timid
A clean return does not mean a timid return. If a deduction is legitimate, claim it. If a credit applies, use it. If your business had a real loss, report it properly. Claim what the law allows, but do not file numbers no one can explain later.
In my experience, tax trouble often starts in ordinary places. Personal expenses get mixed into business categories. Contractor payments are not reconciled. Vehicle use is estimated too casually. A side business has years of losses, but no one has stopped to ask whether it is being treated correctly. A brokerage statement arrives late and never makes it into the final return. It may not seem like a big deal, but it can become one when the IRS asks a simple question and the answer takes three days to find.
That is why the harder question is not “Will this get audited?” It is “Could we explain this if someone asked?”
Look at the items that would be hardest to defend later: meals and travel, home office deductions, vehicle use, rental losses, related-party payments, cash-heavy business income, refundable credits, digital asset transactions, and foreign accounts. If the answer is, “I think we can probably figure it out,” the return is not ready.
Fix the Process Before It Repeats
Records are what keep a legitimate deduction from becoming an argument. The IRS generally lets businesses choose a recordkeeping system that fits their work, but the records still need to show income and expenses clearly. A pile of transactions with no explanation is not much of a system.
For people who requested an extension, the extra time should not just move the same messy pile from April to October. Use it to clean up the weak spots before the return goes in.
If your return is already filed, but the process was rushed, scattered, or too dependent on memory, do not just move on and hope next year is cleaner. Weak systems are already showing. Now is the time to fix them while there is still plenty of 2026 left.
We would rather help you tighten the return before you file than explain it after a notice arrives. The goal is not to file a return that “avoids an audit.” The goal is to file one you can stand behind.
by Boris Benic | Jun 30, 2026 | Blog
Knicks tickets and World Cup seats are not accounting topics, at least not at first glance. But they can teach business owners something about pricing.
People complain about the cost, and then some of them pay anyway. Not because the price is reasonable. Because the experience feels rare, emotional and worth remembering.
That is something business owners should pay attention to.
At the low end of the market, customers may tolerate some friction because they know they are choosing the value option. At the very high end, customers may accept a much bigger price when the experience feels exceptional. The harder place to be is the middle: prices are going up, but the experience still feels ordinary.
World Cup ticket prices have drawn public criticism, with AP reporting prices from about $140 to nearly $33,000. Sports are an obvious example right now, but the same test shows up when a contractor sends a higher estimate, a restaurant changes menu prices or a professional firm raises its fees: at the new price, does the customer still feel the value?
Customers Are Watching More Closely
Business owners have real reasons to raise prices. Labor is more expensive. Fuel is unpredictable. Insurance, rent, technology, materials and borrowing costs are not exactly helping.
Recent NFIB data reported by The Wall Street Journal showed that 36% of small-business owners raised average selling prices in May, the highest level since March 2023. Another 34% planned to raise prices, the highest level since July 2022.
A price increase may be what keeps a business healthy. Many businesses underprice their work for years and train customers to expect too much for too little.
Remember though, customers do not see the cost pressures behind your pricing decisions. They see the invoice, the proposal, the menu, the service fee or the renewal notice. A slow response that might have been overlooked at the old price tends to stand out more once the price goes up.
Rising costs may explain the increase. They do not sell it.
Fine Gets Expensive Fast
When a business is the low-cost option, customers often build in some patience. They may wait a little longer, accept a simpler process or overlook a rough edge because the price matches the experience.
Once prices move up, that patience gets thinner.
Customers may have no real complaint: the work gets done, the product performs as expected and the service is adequate. At a higher price, though, “fine” starts to feel like a weak bargain.
That does not mean every business needs to become a luxury brand. Most customers are not looking for champagne and a red carpet. They want the basics handled so well that they do not have to keep thinking about them.
Answer the phone, explain the bill, set expectations and follow up when you said you would. Fix mistakes without making the customer beg. Make the handoff clean. Make the next step obvious.
None of that is glamorous, but all of it matters more when prices rise.
Being Memorable Can Mean Being Forgettable
A price increase feels different when the customer can point to fewer headaches.
Look for the places where customers have to work too hard: the confusing estimate, the long wait for an answer, the repeated question, the surprise on the bill.
Forrester research reported by The Wall Street Journal found that U.S. customer experience scores had fallen for three straight years, with consumers increasingly skeptical of the value they receive at higher prices. Once customers are already skeptical about value, confusion, delays and weak service cost more than they used to.
Price Is Also a Promise
Before raising prices across the board, run both sides of the decision: the margin you need and the experience the customer will judge.The margin may justify the increase, but the customer experience has to back it up.
If your costs are pushing prices higher, we can help you look at the margin, the cash flow, and the operating decisions that need to support the new price.
by Boris Benic | Jun 1, 2026 | Blog
If you paid IRS penalties or interest during the COVID years, do not leave that notice in the “handled” pile. Before July 10, it deserves one more look.
The National Taxpayer Advocate says tens of millions of taxpayers may be entitled to refunds or abatements of certain COVID-period penalties and interest. The same guidance is clear on the part that matters now: relief is not automatic, and most taxpayers must file by July 10, 2026, to protect their rights.
Why July 10 Matters
The date comes from a court decision called Kwong v. United States. Under the reasoning in that case, certain filing and payment deadlines that fell during the COVID-19 federal disaster period may have been postponed. That period ran from January 20, 2020, through May 11, 2023, plus 60 days. In practical terms, many affected returns and payments would not have been late until after July 10, 2023.
For many taxpayers, the refund claim deadline is three years from that July 10, 2023 date, which brings us to July 10, 2026. If penalties or interest were paid later, the two-year rule may give a taxpayer more time. That detail is exactly why the records matter.
The legal issue may take time. The filing deadline still has to be handled now.
Who Should Check
Start with your records if you filed late, paid late, or had IRS penalties or interest assessed between January 20, 2020, and July 10, 2023. Do not stop at the personal return. For family-business owners, this could involve an entity return, payroll tax filing, estimated tax payment, estate matter, gift tax issue, excise tax item, or international information return.
The useful question is not, “Do I qualify?” The useful first question is, “Did the IRS charge me for being late during a period that may not have been late?”
Pull the Transcript
The first document to review is your IRS tax account transcript. Look for penalty entries, interest charges, assessment dates, payment dates, credits, adjustments, and refunds.
Do not rely only on an old IRS notice. A notice may show what was charged. The transcript helps show when the IRS assessed it, when it was paid, and what tax period is involved. Taxpayers can generally access transcripts through an IRS online account or request them by mail. Mailed transcripts generally arrive in five to ten calendar days.
Know What You Are Asking For
If you already paid the penalty or interest, you may be looking at a refund claim. If the IRS assessed the amount but you have not paid it, you may be looking at an abatement request.
A protective claim may be appropriate when the legal issue or final amount is still unsettled. For this COVID-period issue, that matters because the broader Kwong question may continue through the courts. Waiting for a final answer could mean missing the deadline to preserve the claim.
For penalty and interest claims tied to this issue, taxpayers generally use Form 843, Claim for Refund and Request for Abatement, unless they are changing the underlying tax return itself. The IRS describes Form 843 as the form used to claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax.
File It So It Can Survive Review
A protective claim should be specific. The Taxpayer Advocate says taxpayers generally should write language such as “Protective Refund Claim Pursuant to Kwong Case” and identify the taxpayer, contact information, affected years, legal issue, basis for the claim, and specific penalties or interest involved.
A vague note saying you reserve the right to ask for a refund later is usually not enough. In most cases, taxpayers should file a separate Form 843 for each tax period and each type of tax. Keep a full copy of anything you send, and use a mailing method that proves when the claim was sent and received.
Watch the Promises
Be careful with anyone promising a guaranteed refund. The Taxpayer Advocate warns taxpayers to avoid promoters who charge excessive fees, pressure taxpayers to act, or cannot explain the legal basis for the claim.
Legitimate tax relief starts with records, dates, and the law. Not pressure.
Before July 10
If you paid IRS penalties or interest during the COVID years, now is the time to check the file. We can help you review your transcripts, identify whether your penalties or interest fall into the affected period, and determine whether a refund claim, abatement request, or protective claim should be considered before July 10.
by Boris Benic | May 20, 2026 | Blog
The Hidden Costs You Need to Know
Most business owners look at a foreign business interest and think about it the same way they would any other investment. That’s the wrong starting point.
When it comes to tax reporting, owning a foreign company or partnership outside the United States isn’t just about whether the investment makes money. It’s about what you own, how it’s structured, and what that ownership can trigger on a U.S. return.
Foreign business ownership can show up unexpectedly. A relative asks for help. A side investment comes along. A growth opportunity abroad turns into an ownership stake. Even if this doesn’t apply to you today, it’s worth knowing how these situations usually begin so you can help yourself or a colleague avoid unpleasant surprises later.
Structure Comes First
Foreign entities are not all the same. A corporation is different from a partnership. Minority ownership is different from an active role. Inherited shares, operating control and passive investments can all raise different questions.
Those details drive what has to be reported. Before you get to income, distributions or valuations, get clear on the structure. What type of entity is it? What percentage do you hold? Do you have authority over accounts, decisions or operations? This is not paperwork on the side. It determines what must go on your return.
Your Tax Preparer Needs the Full Picture
Another trap is assuming your preparer has the full picture. Too many people hand over a single statement or a rough explanation and think that’s enough. It isn’t. Foreign ownership treated casually up front turns urgent and expensive at tax time.
If you own part of a business outside the U.S., or think you may soon, gather the formation documents. Confirm the entity type. Document your ownership percentage. Note whether money was contributed or distributed, and whether there are local accounts or filings. The earlier your preparer sees that, the less likely the return turns into a reconstruction project.
Treat It Like a Business Decision, Not a Side Investment
Owning a foreign business overseas is not unusual anymore. Treating it like a simple side investment is where the trouble starts. If you want clarity on how a foreign business interest should be handled for U.S. tax and accounting purposes, we can help you review the structure before avoidable confusion turns into avoidable work.
by Boris Benic | Apr 21, 2026 | Blog
If Qualified Small Business Stock (QSBS) is part of your planning and New York is on your map, this proposal is worth a look. The reason is simple: it is drafted to apply retroactively, starting in 2025.
The New York State Senate has introduced a proposal (S8921A) that would change New York’s treatment of QSBS. Put simply, it would decouple New York from the federal QSBS exclusion under Internal Revenue Code Section 1202 and tax gain that is currently excluded for federal purposes.
As drafted, the change would apply for taxable years beginning on or after January 1, 2025. That effective date is the issue. If you are already in serious conversations about a sale, recapitalization, or other liquidity event, you do not want to discover a state tax surprise late in the process.
Two points before anyone over reads this.
First, this is a proposal in a budget negotiation. The language will move. Provisions get traded or dropped. So you should treat it as a planning input, not a conclusion.
In my experience, two issues create most of the confusion.
Assumption one: “We have QSBS.”
A lot of family businesses are not C corporations. If you operate as an LLC or S corporation, you are not in the QSBS lane at all. Even for C corporations, QSBS is specific. If Section 1202 is part of your plan, it is worth confirming the basics so you know whether this proposal even touches you.
Assumption two: “We will deal with New York residency later.”
State tax exposure is often driven by where you are treated as resident when the gain is recognized, and what documentation supports that position. If you are a New York resident today, or you split time between states, the “later” part tends to arrive quickly once a deal starts moving.
So what should you do with this information right now?
- Start with a quick QSBS inventory.
- Who owns the shares (you, spouse, trust, entity)? When were they acquired? Is the company actually a qualifying C corporation? If ownership is spread across family members or trusts, map it. It does not need to be perfect on day one, but it needs to be accurate enough that everyone is talking about the same facts.
- Put your exit timeline next to your New York facts.
- If a transaction is possible in the next 6 to 24 months, treat New York and New York City residency as part of the planning model. This is not a push to relocate. It is a reminder to understand exposure while you still have choices.
- Ask for a simple New York “what if” estimate.
- Have your CPA run the state and city impact if New York taxes the gain that would otherwise be excluded federally. You do not need a long memo. You need a number range you can plan around and discuss with your advisors.
- If a trust is involved, look at it sooner rather than later.
- New York trust taxation can be technical, and small details can change outcomes. If a trust owns QSBS and a liquidity event is plausible, a review now is usually easier, cheaper, and more productive than a review when documents are already circulating.
- Keep your deal team aligned.
- QSBS issues can affect structure, timing, and after-tax proceeds. A quick alignment call with your CPA and attorney, using the same ownership map and the same residency facts, often prevents avoidable last-minute confusion.
The good news is you do not need to predict the outcome to plan well.
Retroactive tax changes do not ruin deals. But, they can change the math after you thought it was settled.
If QSBS is in your plan and a liquidity event is on the horizon, we can usually pressure-test this in one short conversation: confirm whether QSBS is actually in play, estimate the New York downside if this passes as drafted, and identify any documentation or planning steps that are sensible to do now while it is still a proposal.
I look forward to hearing about your situation.
