My company just went thru this last year. One thing to watch for in some states is that sales tax registration can sometimes AUTOMATICALLY register you with the Sec of State as a foreign entity!!!! We didn't know this and ended up with penalties for not filing annual reports in 2 states where we thought we were just registered for sales tax.

This thread has been incredibly helpful! I'm dealing with a similar situation expanding from my home state into multiple others. One thing I'd add for anyone reading this - make sure you understand the difference between "doing business" and just having sales tax nexus. Some states have a lower threshold for requiring foreign entity registration than they do for income tax obligations. You might trigger the requirement to register as a foreign entity (and file annual reports) even if you don't owe income tax in that state. Also, keep detailed records of WHERE your sales are coming from geographically. Some states look at where your customers are located, others look at where you ship from or deliver to. This can affect both your nexus calculations and how you apportion income if you do end up owing tax in multiple states. The tools mentioned here sound really useful - I've been trying to track all this manually in spreadsheets and it's becoming unmanageable as we grow. Definitely going to check out some of these resources before we hit our next threshold states.

Just wanted to add my experience - we handled a similar situation differently. Our foreign investor (30% shareholder) paid some corporate expenses directly, and our CPA advised us to treat these as capital contributions rather than loans. The key factors in our decision were: 1. There was no expectation of repayment 2. No loan agreement was created at the time 3. The payments were relatively small (under $5k total) We documented this with a corporate resolution acknowledging the payments as capital contributions, which increased the shareholder's basis in the company. This was reported on line 19 of Part IV ("Capital contributions") instead of line 9 or 22. The approach you take really depends on whether there's an expectation of repayment or not.

I think everyone is overlooking the simplest approach here. When a foreign shareholder pays expenses on behalf of the corporation, you can treat this as a reimbursable expense. The corporation should record an account payable to the shareholder, and then when funds are available, reimburse them. This wouldn't need to be reported on Form 5472 at all if the reimbursement is done within a reasonable timeframe and at the exact amount (with no interest or other compensation). It's only when the arrangement becomes a long-term financing solution that it should be treated as a loan or capital contribution requiring 5472 reporting.

8 Microsoft has a free online version of Office (Word, Excel, PowerPoint) that you can use through a web browser at office.com. It's not as full-featured as the desktop version but might be enough for basic work tasks without having to pay for a subscription.

Another alternative worth considering is LibreOffice, which is completely free and open-source. It's compatible with Microsoft Office file formats and includes Writer (Word equivalent), Calc (Excel equivalent), and Impress (PowerPoint equivalent). While it may have a slightly different interface, it handles most business tasks well and could be a good temporary solution while you work on getting your employer to provide or reimburse the Microsoft Office subscription. I've used it for basic document editing and spreadsheet work and found it quite capable for most standard office tasks.

This is such a common question for remote workers! I went through the same confusion when I first started working from home full-time. One thing I'd add to what others have mentioned - even though you can't deduct internet as a W-2 employee at the federal level, some states still allow certain unreimbursed employee expenses. It's worth checking your specific state's tax rules since they can differ significantly from federal guidelines. Also, definitely document your work-from-home setup and expenses even if you can't deduct them right now. The Tax Cuts and Jobs Act provisions expire in 2025, so there's a chance the rules could change for future tax years. Having good records ready could be helpful if the deduction becomes available again. And like others said, definitely explore reimbursement options with your employer first - that's tax-free money in your pocket versus a deduction that reduces your taxable income.

This thread has been really helpful! I'm also 100% remote and had no idea about the Tax Cuts and Jobs Act eliminating those deductions for W-2 employees. One question I haven't seen addressed - what about if you have a dedicated business line? I actually pay for two internet connections at my house: our regular family internet and a separate business-grade connection that I use exclusively for work calls and video conferences (my company requires high reliability for client meetings). Would that change anything about deductibility, or is it still the same rule regardless of how the internet is used? Also curious if anyone knows whether the "exclusively for business" rule applies differently to internet versus other home office expenses? Like I know with home office space you need exclusive business use, but internet seems like it would naturally be harder to separate that way.

I'm dealing with almost this exact situation - sold my small construction business last December and the new owners have been completely unresponsive about their obligations, including filing Form 8822-B. I've been getting IRS notices for their quarterly employment taxes and it's been incredibly stressful. What's been most helpful from reading through this entire thread is seeing how many people have successfully resolved this through direct communication with the IRS, even when the new owners won't cooperate. The consistent message seems to be that comprehensive documentation can solve this problem even without the 8822-B being properly filed. I'm planning to follow the approach that @StarSurfer and others outlined - sending a certified mail package with my Asset Purchase Agreement, final tax returns, state transfer documentation, and a detailed cover letter. The key insight from @GalacticGuardian about specifically requesting that future correspondence be redirected to the new owners' address is really smart. One additional thing I learned from my tax preparer: if you're still getting notices after sending your documentation package, you can reference the certified mail tracking number and date in follow-up calls to the IRS. This helps them locate your submission in their system and shows you've been proactive about resolving the issue. @Giovanni Martello - have you had any success yet with getting this resolved? Your original post really captured the anxiety I've been feeling about this whole situation. It's reassuring to know we're not alone in dealing with irresponsible buyers who don't handle their post-sale obligations properly.

I'm going through this exact situation right now and can really relate to the stress and anxiety you're experiencing. I sold my small accounting practice in November and the buyers have been completely unresponsive about filing Form 8822-B. I've been getting IRS notices for their tax obligations and it's been keeping me up at night. After reading through all the responses here, I'm feeling much more confident about resolving this. The key takeaway seems to be that you don't need to wait for the new owners to cooperate - you can take direct action with the IRS by providing comprehensive documentation of the sale. I'm putting together my documentation package based on what others have shared: my Asset Purchase Agreement with closing date highlighted, final tax returns showing the end of my ownership period, state registration transfer documents, and a detailed cover letter explaining the situation. The advice about requesting that future correspondence be redirected to the new owners' address is particularly helpful. One thing I learned from my CPA is to also include a statement in your cover letter that you're not trying to file Form 8822-B on behalf of the new owners (since you can't), but rather providing evidence that you're no longer the responsible party as of the sale date. This helps clarify your position with the IRS. The most reassuring thing from reading everyone's experiences is that this is a common problem with established solutions. The IRS deals with business ownership transfers regularly, and they have procedures to handle situations where the proper forms weren't filed by the new owners.