Articles Posted in IRS audit

QSBS stacking is how sophisticated founders and investors try to push the Qualified Small Business Stock benefit beyond a single exclusion cap. The exclusion under Section 1202 is limited per company, but that limit applies separately to each taxpayer who owns the stock. By spreading QSBS among family members or trusts before a sale, and…

QSBS eligibility is where the Qualified Small Business Stock benefit is won or lost. The exclusion under Section 1202 can erase federal tax on a large share of your gain, but only if the stock clears every requirement, both when it was issued and across your holding period. Many taxpayers assume they qualify because a…

Claiming the Qualified Small Business Stock exclusion on your tax return is not the finish line. It is the moment the position becomes reviewable. A QSBS audit is the IRS’s examination of whether a Section 1202 exclusion was actually earned, and because these claims routinely shelter seven- and eight-figure gains, they draw serious attention. When…

The 2025 QSBS changes are the most significant expansion of the Qualified Small Business Stock rules in more than a decade. Enacted as part of the One Big Beautiful Bill Act, the new law rewrites key parts of Section 1202 for stock acquired after July 4, 2025. It shortens the wait for a partial exclusion,…

Qualified Small Business Stock (QSBS) is one of the most powerful tax benefits available to founders, early employees, and investors. Under Section 1202 of the Internal Revenue Code, a taxpayer who holds qualifying stock in a small C corporation can exclude a large portion, and in many cases all, of the capital gain when the…

Kugelman Law attorney Otto Bosch was quoted in a Tax Notes article published May 26, 2026 — “More Scrutiny of Deferred Legal Fee Structures Could Be Coming” by Lauren Loricchio — providing the insider perspective on why the gap between an IRS audit campaign announcement and active enforcement is routine, what is happening inside IRS…

If you have received an IRS audit notice — or you are worried one might be coming — one of the first questions worth answering is who, exactly, will be examining your return. The answer matters more than most taxpayers realize. The IRS is not a single, undifferentiated organization. Examinations are conducted by specific employees…

The Form 3520 penalty is one of the harshest in the Internal Revenue Code. A U.S. person who receives a gift or inheritance from a foreign person exceeding the annual reporting thresholds and fails to timely file Form 3520 faces a penalty of up to 25% of the gift or inheritance — even though the…

An IRS CP2000 notice response is one of the most time-sensitive tasks a taxpayer will ever face. The CP2000 — often called an “underreporter notice” — arrives when the IRS believes the income, payments, credits, or deductions you reported on your tax return do not match what third parties reported about you. You have a…

Quick answer: IRS Letter 6174 is a “soft” educational letter the IRS sends when it has information that you own or trade cryptocurrency and wants to be sure you reported it correctly. It does not require a response. That does not mean it is nothing. It means the IRS already has data on you, and…