January 7, 2027

Webcast

2 CPE Credits

Don Farmer's Top 10 S Corporation Return Issues & How to Avoid Them

January 7, 2027
Webcast
2 CPE Credits

Don Farmer's Top 10 S Corporation Return Issues & How to Avoid Them

  • View Bio

    Instructor

    Nick
    Preusch

    View Bio

    Nick Preusch

    Bio

    Nick Preusch's, CPA, JD, LLM, primary focus is performing tax services for high wealth individuals and mid-to-large business entities. His responsibilities include tax research related to complex business transactions and tax return preparation and review. Nick also works closely with businesses to find tax efficiencies through ever-changing tax legislation.

    Nick is an IRS attorney at the IRS National Office in Washington, DC, where he was the lead attorney for several significant tax ethics cases. He is a licensed attorney in New York and a certified public accountant in Virginia. Nick earned an LLM in Taxation from Georgetown University, a JD from Case Western Reserve University, and an MS in Accounting from the University of Connecticut.

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, participants will examine practical strategies to improve accuracy, strengthen documentation, and reduce audit risk in S corporation engagements.

Learning Objectives

1. Identify common technical and reporting errors on S corporation tax returns

2. Calculate shareholder stock and debt basis and determine the impact on loss deductions and distributions

3. Identify reasonable compensation requirements and related payroll compliance risks

4. Determine eligibility and operational requirements necessary to maintain S corporation status

5. Apply best practices to reduce audit exposure and improve return accuracy

Major Topics

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

1. Failure to properly track shareholder basis

2. Improper deduction of losses without sufficient basis

3. Distributions in excess of basis

4. Inadequate reasonable compensation

5. Shareholder loans misclassified or poorly documented

6. Built-in gains (BIG) tax issues

7. Passive investment income and termination risk

8. Improper allocation of income and expenses

9. Fringe benefits and shareholder-employee issues

10. State tax and composite filing oversights

CPE Credits Available

2 CPE Credits
2
Taxes

Things to Know About This Course

Course Level

  • Intermediate

Professional Area of Focus

  • Tax

Prerequisites

Working knowledge of S corporation taxation and experience preparing or reviewing Form 1120-S returns.

Advanced Preparation

None

Provider

Don Farmer Tax Education

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