I fell for something similar in 2022 and I'm still dealing with the audit fallout. The "tax consultant" promised a 3:1 deduction ratio through an LLC arrangement. I sent $50,000 thinking I'd get a $150,000 deduction. The IRS flagged it immediately. Turns out the LLC was technically a charity but was misrepresenting how the funds were being used. I not only lost most of my "donation" (they had already spent it), but I'm facing penalties for an improper deduction. My advice: RUN from anyone promising multiplication of deductions. Legitimate deductions are 1:1 at most. The only exceptions involve very specific situations that don't apply to cash donations to random LLCs.

This is absolutely a scam - please don't fall for it. I'm a CPA and I see these schemes targeting people every tax season. The "5x deduction" claim is physically impossible under current tax law. Charitable deductions work on a 1:1 basis - you donate $100, you can deduct up to $100 (subject to AGI limitations). The fact that they're pressuring you for a quick decision is textbook scammer behavior. Legitimate tax professionals encourage clients to take time to research and understand any strategy. A few additional red flags in your situation: - LLCs are generally NOT qualified charitable organizations under 501(c)(3) - Any legitimate massive deduction strategy would require extensive documentation and likely IRS pre-approval - Real tax professionals provide written analyses with specific code references, not verbal promises If you want legitimate tax savings, consider: maximizing retirement contributions, harvesting investment losses, or making actual donations to verified 501(c)(3) organizations. These won't give you magical multipliers, but they're legal and won't land you in audit hell. Please report this consultant to your state's board of accountancy if they claim to be a CPA, or to the IRS if they're operating as a tax preparer.

Has anyone addressed the issue of self-employment taxes in this scenario? If the kids are paid through the Family Management LLC as independent contractors, they'll owe self-employment tax (15.3%) on their earnings. If they're employees of the LLC, the LLC will need to handle payroll taxes. Either way, there's no avoiding FICA taxes completely in this arrangement, which is something to factor into your calculations.

This is a solid tax strategy if executed properly, but I'd strongly recommend getting everything documented before you start. The key is making sure the work arrangement has genuine business substance. A few practical tips from my experience with similar setups: 1. Have your kids punch in/out with a simple time tracking system - even a basic app works 2. Create written job descriptions that match what outside contractors would do 3. Pay them via direct deposit to their own bank accounts (not cash) 4. Keep the LLC and S-Corp completely separate - different bank accounts, proper invoicing between entities One thing to watch: if your kids are under 18 and this is structured as a sole proprietorship or partnership (with only you and your spouse), they may be exempt from FICA taxes. But since you're talking about an LLC structure, that exemption likely won't apply. The expenses you listed (car payments, school tuition, etc.) are perfectly fine uses of their earned income. Once they're legitimately paid for real work, it's their money to spend as they choose. Just make sure the compensation is reasonable for the work performed - research what you'd pay outsiders for similar services and use that as your benchmark.

Has anyone here successfully contested a Sprintax determination? I'm wondering if there's a way to override their system when it makes a mistake like this.

I had a very similar situation with Sprintax last year! Based on what you've described, you're absolutely correct that you should be filing as a nonresident alien. With only 3 calendar years total in the US (2 as a student, 1 as an intern), you're still well within both exemption periods. Here's what worked for me when Sprintax made the same mistake: Go to their help section and submit a support ticket explaining your exact visa timeline. Be very specific about the dates and visa categories - mention that you had 2 calendar years as F1/J1 student (within the 5-year exemption) and 1 calendar year as J1 intern (within the 2-year exemption). Reference IRS Publication 519 and specifically mention the "exempt individual" provisions. In my case, they corrected it within 2-3 business days and I was able to proceed with the correct nonresident filing. Don't let the software override what you know is correct - you definitely shouldn't be paying US tax on worldwide income if you're still in your exempt periods!

Has anyone tried using the Electronic Federal Tax Payment System (EFTPS) for making their quarterly payments? I just started using it this year and it seems to keep better track of my payment history than my old method of mailing checks.

Just to add some clarity on the penalty calculation - the 8% annual rate that Butch mentioned is correct for 2025 Q1, but it's worth noting this rate gets updated quarterly based on federal short-term rates. The IRS publishes these rates in Revenue Rulings, so you'll want to check for updates each quarter. One thing that caught me off guard when I first dealt with this: the penalty applies to each quarter separately, so even if your total annual tax liability ends up being correct, you can still owe penalties for individual quarters where you underpaid. The safe harbor rules Butch mentioned (90% current year or 100%/110% prior year) are calculated on an annual basis, but if you don't meet them, each quarter gets evaluated independently for penalties. Pro tip: if you're self-employed with variable income, consider using Form 2210 Schedule AI (Annualized Income Installment Method). It lets you base each quarterly payment on your actual income for that period rather than assuming equal payments throughout the year. This can significantly reduce or eliminate penalties if your income is seasonal or irregular.

To all those having trouble reaching a human at IRS. I just ran across this video that gave me a shortcut to reach a human. Hope it helps! https://youtu.be/_kiP6q8DX5c

I've been waiting 28 weeks now with the same code 971 on my transcript! It's so frustrating not knowing what's happening. I called the IRS multiple times but they just keep saying "it's being processed" with no real timeline. Has anyone actually gotten through to someone who could give more specific info about why it's taking so long? At this point I'm wondering if there's an issue with my amendment that I don't know about.