Has anybody considered the step-transaction doctrine in this scenario? The IRS might look at the before/after ownership and conclude this was just a scheme to extract cash while avoiding dividend treatment.

One aspect that hasn't been fully explored is the timing of this transaction. If you're planning to do this near year-end or in conjunction with other corporate activities, the IRS will scrutinize the timing for tax avoidance motives. I'd also recommend documenting legitimate operational reasons for the acquisition well in advance. For example, if Corp B provides services or products that Corp A actually uses, or if there are genuine economies of scale from combining operations, make sure this is documented in board resolutions and business plans before executing the transaction. Another consideration: if Corp B has net operating losses or other tax attributes, there are complex rules under Sections 382 and 383 that could limit their use after the acquisition. This might actually reduce the overall tax efficiency of the structure. Have you considered whether a redemption under Section 302 might be a cleaner approach? If structured properly as a "substantially disproportionate" or "complete termination" redemption, you could potentially achieve capital gains treatment without the complexity of maintaining two corporate entities.

Might be worth asking your client to contact the IRS on their end to confirm the 1099-NEC was submitted correctly. Sometimes businesses think they've completed the process but actually missed a step. Had this happen with a small business client of mine last year - they thought they'd filed everything but it turned out their tax software had saved the forms as "pending" instead of actually submitting them. Caused a huge headache for their contractors.

Just went through this exact scenario two months ago! The key thing to remember is that your filing is correct - you reported the income you received, which is what matters. The IRS verification letter is just their way of reconciling their records when there's a timing mismatch. A few practical tips from my experience: 1) Respond to the letter within the timeframe they specify (usually 30 days), 2) Include a copy of the 1099-NEC you received along with a brief explanation that your client filed late, and 3) Keep copies of all your correspondence. The refund delay is frustrating but typically resolves within 6-8 weeks once they receive your response. I actually called the IRS after responding and they confirmed my documentation was sufficient - they just needed to match it against what they eventually received from my client. Don't stress too much about it, this is more common than you'd think with small businesses and independent contractors.

5 Whatever resource you choose, just make sure it's updated for the current tax year. I bought a highly recommended book on Amazon last year only to discover it was referencing tax laws from 2018 that had changed. Wasted so much time learning outdated info!

I completely understand that tax anxiety! As someone who also runs a small business, I found that starting with the IRS's own Publication 334 "Tax Guide for Small Business" was really helpful - it's free on their website and written more clearly than you'd expect from the IRS. Another resource I'd add to the great suggestions already mentioned is the SCORE mentorship program. They offer free workshops specifically on small business taxes, and you can even get paired with a retired accountant or business owner who can explain concepts in plain English. Having someone you can ask follow-up questions to really helped bridge the gap between reading about taxes and actually understanding them. The key is finding resources that encourage questions rather than just throwing information at you. Your accountant will definitely appreciate working with a more informed client!

dont stress it. happened to me last year and check showed up pretty quick

Been through this exact situation! When TPG can't deposit to a closed account, they'll automatically mail you a paper check to your last known address. Usually takes about 10-14 business days after the failed deposit attempt. Make sure to update your address with both TPG and the IRS if you've moved. You can call TPG customer service to confirm they have your correct mailing address - their number should be on any paperwork you got from your tax preparer. Hang in there, the check will come!

For context, the IRS is currently processing approximately 2.4 million returns per day, with joint returns taking on average 17% longer to process than individual returns. Based on current processing metrics, a transcript showing no return filed for 4 days is well within normal parameters, especially during peak filing season (January 29 to April 15). The system typically updates transcripts in batches, with the highest volume of updates occurring Wednesday through Friday.

I'm going through the exact same thing right now! Filed on March 5th and my transcript has been stuck on "no tax return filed" since then. This is also my first year filing jointly after getting married last fall, so it's reassuring to hear that joint returns can take longer to process. I've been checking obsessively every morning, but based on what everyone's sharing here, it sounds like I just need to be patient and wait for the weekly processing cycles to catch up. Thanks for posting this - it's really helpful to know I'm not the only one experiencing this delay!