Anyone know if there's a threshold for how many board members can overlap before you're automatically considered related organizations? We have 2 people who serve on both our main nonprofit and our supporting foundation (out of 13 board members total on each).

This is such a helpful discussion! I'm dealing with a similar situation at our charter school network where we have a supporting foundation. One thing I wanted to add - make sure you're also checking the intermediate sanctions rules under section 4958. When you have overlapping board members between related organizations, any compensation arrangements could potentially be subject to excess benefit transaction penalties if they're not properly documented as reasonable. We learned this the hard way when the IRS questioned whether our executive director's compensation was reasonable given that she served on both boards and the foundation was paying part of her salary. We had to provide extensive documentation showing comparable salaries at similar organizations. It's worth having your compensation committee document their decision-making process and maintain records of any salary surveys or benchmarking studies used. Also, don't forget about the intermediate sanctions disclosure requirements on Schedule L - you need to report any loans, grants, or other financial transactions between the related entities, including that property lease arrangement mentioned in the original post.

Manager, please understand that what he's asking for isn't a "tax exempt week" in any official IRS sense. He's just trying to increase his take-home pay by reducing withholding. This doesn't reduce his actual tax liability at all - it just changes WHEN he pays it. If he makes $82k, he's going to owe taxes. Period. So if he gets more in his paycheck now, he'll either get less refund or owe more when he files. Make sure he understands this isn't free money!

As someone who works in payroll processing, I want to add a practical perspective here. When employees request withholding changes for temporary financial hardships, I always recommend they put a reminder in their calendar to submit a new W-4 to return to normal withholding within 1-2 months. The biggest mistake I see is people forgetting to change back, then getting hit with a big tax bill they weren't expecting. If your employee does adjust his withholding, maybe suggest he set up that reminder right away while it's fresh in his mind. Also, depending on your payroll system, some allow you to set an "end date" for withholding changes, which automatically reverts back to the previous settings. Worth asking your payroll department if that's an option - it removes the human error factor completely.

Hey guys, I actually found a way to skip the hold time. There's this service called claimyr.com that calls for you, waits on hold, and then connects you when an agent picks up. It costs $20, but it saved me hours of waiting. Here's the link: https://www.claimyr.com

Another option to consider is requesting your account transcript by mail or fax - it's free and gives you a complete breakdown of your tax account, including any balances owed, payments made, and penalties/interest. You can request it using Form 4506-T or by calling the automated transcript line at 1-800-908-9946. It takes about 5-10 business days to receive by mail, but you don't have to deal with hold times. Just have your SSN, date of birth, and filing status ready when you call the automated line.

Just wanna say I was in almost the exact same boat (8 years unfiled, same job) and I got through it. Took me about 2 months working on weekends. The hardest part was just starting. Once I filed the first year, it got easier. For what it's worth, I did owe money in the end, but the IRS was actually reasonable about setting up a payment plan. The monthly amount was way less scary than the total figure.

I'm dealing with a similar situation (7 years unfiled) and wanted to share what I learned from my tax attorney consultation. The key thing that helped reduce my stress was understanding that the IRS has a "Failure to File" safe harbor provision - if you consistently had taxes withheld from your paychecks and were due refunds in most years, the penalties are often minimal or waived entirely. Since you mentioned being at the same job the whole time, there's a good chance you had regular withholdings. The IRS is generally much more lenient with people who were overwithholding versus those who were underpaying. One thing I wish I'd known earlier: if you're going to owe money across multiple years, consider filing all your returns at once and then immediately requesting an installment agreement. This stops the failure-to-file penalties from continuing to accrue and shows good faith effort to comply. Also, don't beat yourself up about the delay - life happens, and depression makes everything harder. The fact that you're tackling this now shows real strength. You've got this!

Has anyone looked into whether state tax laws might treat this differently? I know for federal purposes what everyone's saying about tax classification controlling is right, but I'm in California and they sometimes have their own weird rules about business entities.

This is a really complex area that trips up a lot of business owners! I've been dealing with similar multi-entity structures for years as a tax preparer, and I wanted to add a few practical considerations that might help. One thing that often gets overlooked is the administrative burden of maintaining multiple entities properly. You'll need separate bank accounts, separate books, formal resolutions for major decisions, and regular distributions documented properly. The IRS loves to challenge structures where the paperwork doesn't match the claimed entity separation. Also, consider the timing of distributions. If your LLC (taxed as partnership) makes distributions to the S-Corps, and then the S-Corps need to pay your salaries, you'll want to coordinate the cash flow carefully. I've seen situations where the S-Corp doesn't have enough cash to pay reasonable salaries because the LLC distributions weren't timed properly. One more thought - if you're considering converting the LLC to S-Corp status instead, remember that you'll lose the flexibility to make special allocations that partnerships allow. With an S-Corp, everything has to be pro-rata based on ownership percentages. I'd strongly recommend getting a second opinion from a CPA who specializes in multi-entity structures before making any changes. The tax savings can be significant, but the compliance requirements are real.