Attention to Detail in Tax Case Saves Real Estate Brokerage Tens of Thousands of Dollars

Client:

Real estate brokers

Challenge:

A married couple’s real estate brokerage firm was selected by the IRS for a reasonable compensation employment tax audit. The IRS was investigating the years before the couple hired a new CPA, who brought the owners into compliance with reasonable compensation regulations. The IRS asserted a significantly large “reasonable salary,” thereby increasing the couple’s liability drastically, and with substantial penalties. Fineman West was tasked with convincing the IRS to reduce its asserted reasonable salary and the overall tax liability.

Strategy:

With a reputation for successful settlement of tax controversies, Fineman West was the obvious first call. We understand that the solution to our clients’ problems can be found in small – but vital – details. Through an in-depth and determined investigation, we caught a significant detail initially dismissed by the couple regarding the part-time nature of their work during the audited period. We compiled proof of this, aided by the couple’s well-maintained e-mail records, and supplemented the materials with research and precedents in case law.

Result:

With this new information, and using persuasive methods and relationships developed over years of experience with tax authorities, we were able to not only slash the reasonable salary estimate made by the IRS but also remove the assessed penalties completely, thereby reducing liability by 91 percent. We saved the client tens of thousands in taxes and brought them into compliance with reasonable compensation regulations, providing security for their business for decades to come.

Ready to transform your business? Contact us today at (213) 688-9898 or info@fwllp.com.