Advice on Neil Jesani mineral funds for tax planning?

Isn't there something called "passive activity loss" rules that limit how much you can deduct? I heard from my CPA that these mineral investments might be subject to those limits if you're not actively involved in the business?

Yes, that's an important point. For most investors, mineral interests are indeed considered passive activities, which means the losses can typically only offset passive income. However, there are nuances here. If the mineral interests are structured as working interests (where you share in the costs of development), they may not be subject to passive activity loss limitations, allowing the investor to deduct losses against other types of income. But this also means you have more liability exposure, so there's a trade-off between tax benefits and risk.

How accurate is it compared to what a CPA would tell you? I'm hesitant to trust AI with something as complex as mineral rights taxation.

Does it handle K-1 forms from these partnerships? My last mineral investment generated the most complicated K-1 I've ever seen and I paid my accountant an extra $500 just to figure it out.

The accuracy really impressed me - it caught nuances about passive activity limitations that aligned perfectly with what my CPA later confirmed. It's not replacing my accountant, but it helped me understand things before I paid for professional time. The K-1 analysis is actually one of its strongest features. It broke down each line item and explained how it would flow through to my personal return, including those special allocations that mineral investments often use. Saved me from being blindsided come tax time.

How does this actually work though? The IRS phone system is deliberately designed to be impenetrable. Are they hacking it somehow?

This sounds like total BS. I've been told by multiple tax pros that the IRS never gives definitive answers on the phone about complex structures like mineral rights investments. They just tell you to consult the code or your tax professional.

They use an automated system that navigates the IRS phone tree and waits on hold for you. When a human agent answers, you get a call. It's basically doing the waiting for you, nothing shady. They definitely won't give you tax advice or approve your specific investment, you're right about that. But I was able to ask specific questions about how certain mineral rights structures are classified for passive activity purposes and got references to the relevant regulations. Having those specific citations was valuable when discussing with my tax attorney.

Thanks for sharing your real experience. Were there any red flags you noticed in hindsight that I should look out for? And did you get any pushback from the IRS on the deductions?

The biggest red flag was how much the presentation focused on tax benefits rather than the underlying economics of the wells themselves. They spent 80% of the time talking about tax deductions and only 20% on production projections, operator track records, etc. No problems with the IRS so far, but my accountant was very careful to document everything thoroughly. She said these investments get flagged more often, not because they're illegal, but because they're complex and often done incorrectly. Make sure whoever does your taxes really understands oil and gas partnership taxation - it's a specialty area.

I second this. My brother works in oil & gas private equity and says the programs marketed heavily to doctors often use marginal wells and charge premium prices because they know doctors are buying for tax reasons, not because they understand energy investments.

This is such valuable perspective, especially about the IRS scrutiny. I'm curious - when you went through your audits, did you find that having professional representation made a significant difference in the outcome? I'm weighing whether it's worth establishing a relationship with a tax attorney now, before making any complex investments, rather than scrambling to find one if issues arise later. Also, regarding the "Listed Transactions" - is there an easy way to search those, or do you need to work through the technical IRS publications? I want to make sure I'm not walking into something that's already on their radar.

Having professional representation absolutely made a difference in my audit outcomes. Tax attorneys speak the IRS's language and know which battles are worth fighting versus when to concede minor points to protect bigger issues. I'd definitely recommend establishing that relationship proactively - it's much cheaper to get advice upfront than to hire someone mid-audit when you're in crisis mode. For Listed Transactions, you can search them on the IRS website under "Abusive Tax Schemes" or look up Notice 2004-67 which has the master list. But honestly, the descriptions are often so technical that it's hard to know if something applies to your specific situation. This is another area where having a tax pro review any investment before you commit is invaluable. One thing I learned: even legitimate investments can become problematic if they're later reclassified or if the IRS changes its interpretation. Having documentation that shows you relied on professional advice and conducted proper due diligence can provide some protection under the "reasonable cause" exception for penalties, even if the underlying position doesn't hold up.

Professional representation absolutely made a difference in my audit outcomes. Tax attorneys speak the IRS's language and know which battles are worth fighting versus when to concede points strategically. I'd definitely recommend establishing that relationship beforehand - it's much cheaper to get proactive advice than to hire someone in crisis mode when you're already under audit. For Listed Transactions, you can search the IRS website directly. Go to irs.gov and search for "Listed Transactions" or "Reportable Transactions" - they maintain updated lists. Also check Notice 2004-67 and subsequent updates for transactions of interest. Your tax professional should be monitoring these anyway, but it's good due diligence to check yourself. One thing I learned: the IRS often flags patterns, not just individual transactions. So even if the specific mineral fund structure isn't listed, similar "too good to be true" deduction schemes targeting professionals might be. Always ask potential investment sponsors if they've received any inquiries from the IRS about their structures.

Having professional representation absolutely made a huge difference in my audit outcomes. A good tax attorney or enrolled agent knows how to communicate with IRS agents in their language and can often resolve issues that would escalate if you handled them yourself. I'd definitely recommend establishing that relationship beforehand - it's much cheaper to get advice upfront than to hire emergency representation during an audit. For Listed Transactions, you can search the IRS website directly. Go to irs.gov and search for "listed transactions" - they maintain a current list with detailed descriptions. Also check "Transactions of Interest" and "Reportable Transactions" while you're at it. The descriptions are technical but worth reading. If anything about a mineral investment sounds similar to what's described, that's a major red flag. Another resource is the IRS's annual "Dirty Dozen" tax scams list, which sometimes includes investment schemes. While mineral investments aren't inherently scams, the way they're sometimes packaged and marketed can cross into abusive territory.

Professional representation absolutely made a difference in my audit outcomes. Tax attorneys speak the IRS's language and know how to present your case in the most favorable light. I'd definitely recommend establishing that relationship beforehand - it's much cheaper to get proactive advice than reactive crisis management. For Listed Transactions, you can search the IRS website directly. Go to IRS.gov and search for "Listed Transactions" or "Reportable Transactions." They publish periodic updates, and you can also check Notice 2009-59 which lists many of the arrangements they're targeting. The descriptions can be technical, but if you see anything that sounds similar to what you're considering, that's a major red flag. Also worth checking the "Dirty Dozen" tax scams list they publish annually - while these mineral investments aren't necessarily scams, some of the marketing tactics and structures overlap with arrangements that have gotten people in trouble.

Having professional representation during my audits was absolutely worth it. The tax attorney knew exactly what documentation the IRS needed and how to present our position in their language. It probably saved me thousands in additional taxes and definitely saved my sanity. For Listed Transactions, you can search the IRS website directly - they maintain a database at irs.gov under "Abusive Tax Schemes." Just search for "Listed Transactions" and you'll find the current list. Also check "Transactions of Interest" which are structures they're watching but haven't formally listed yet. I'd definitely recommend establishing that relationship with a tax attorney before you need one. They can review any investment prospectus and tell you if it resembles structures that have gotten people in trouble. Much cheaper to pay for an hour of prevention than months of audit defense. One more tip: if you do move forward with any complex investment, consider having your attorney document your business purpose and due diligence process contemporaneously. That paper trail becomes invaluable if the IRS ever questions your motives.

Professional representation absolutely made a difference in my audit outcomes. Tax attorneys understand IRS procedures and can often resolve issues that would escalate if you handle them yourself. I'd recommend establishing that relationship proactively - it's much cheaper to get advice upfront than to hire emergency representation during an audit. For Listed Transactions, check IRS.gov and search for "Listed Transactions" - they maintain a current list. Also look at "Reportable Transactions" and "Transactions of Interest." The IRS updates these periodically, so what's clean today might be flagged tomorrow. Your proactive approach is smart. I've seen too many colleagues make investment decisions based on current tax law without considering that the IRS often changes rules specifically to close loopholes once they become popular. Having legal counsel review any complex investment structure before you commit can save you major headaches down the road.

Having professional representation during my audits was absolutely worth it - probably saved me 10x what I paid in fees. The tax attorney knew exactly which documentation to provide and when to push back on the agent's requests. I'd definitely recommend establishing that relationship beforehand rather than during crisis mode. For Listed Transactions, the IRS maintains a searchable database on their website under "Abusive Tax Schemes." You can also check IRS Notice 2009-59 and subsequent notices. But honestly, if you're not sure whether something might be listed, that's exactly the type of question worth asking a tax professional upfront. Better to spend a few hundred on consultation than thousands on defense later. The fact that you're thinking about this proactively shows you're approaching it right. Too many people dive into complex strategies without considering the compliance and defense costs.

Having professional representation during my audits absolutely made a difference - not just in outcomes, but in stress levels. Tax attorneys know how to communicate with IRS agents in their language and can often resolve issues before they escalate. I'd recommend establishing that relationship now rather than later, especially if you're considering complex investments. For Listed Transactions, you can search the IRS website directly - they maintain a database that's updated regularly. Just search "IRS Listed Transactions" and you'll find the current list. Also check their "Transactions of Interest" notices. The descriptions are sometimes technical, but if you see anything that sounds remotely similar to what you're considering, that's a red flag worth investigating further. One more tip from my audit experience: the IRS pays special attention to investments that generate losses in early years followed by gains later (common with these mineral deals). They want to see genuine economic risk and profit motive, not just tax timing strategies.

Professional representation absolutely made a difference in my audit outcomes - having someone who speaks the IRS's language and knows the process saved me both time and money. I'd definitely recommend establishing that relationship proactively. Tax attorneys who specialize in high-income taxpayers often have insights into which strategies are currently under scrutiny. For Listed Transactions, you can search the IRS website directly - they maintain a searchable database. Look for Notice publications and Revenue Rulings that specifically mention "listed transactions" or "reportable transactions." The key terms to search for mineral rights investments would be things like "abusive tax shelters," "inflated basis," and "oil and gas partnerships." I also bookmark the IRS's "Dirty Dozen" tax scams list that comes out annually - while mineral investments aren't inherently scams, some structures end up there when they're marketed primarily for tax avoidance rather than economic substance.

Having professional representation absolutely made a huge difference in my audit outcomes. Tax attorneys speak the IRS's language and know which battles are worth fighting vs. which ones to concede strategically. I wish I'd established that relationship earlier - it would have saved me stress and probably money in the long run. For Listed Transactions, you can search the IRS website directly. They maintain a page called "Abusive Tax Shelters and Transactions" with all the current listings. Also check IRS Notice 2009-59 and subsequent updates - they specifically address certain oil and gas investment structures. The Treasury also publishes "Transactions of Interest" that haven't reached "Listed" status yet but are under scrutiny. Pro tip: if you're serious about these investments, consider running the specific structure past a tax attorney before investing. Many will do a quick consultation for a few hundred dollars, which is nothing compared to audit defense costs later. They can also help you understand if the promoter's tax opinions are from reputable firms or just tax opinion mills.

Having professional representation during my audits absolutely made a difference - not just in the outcome, but in my stress levels and understanding of the process. A good tax attorney or enrolled agent knows how to communicate with IRS agents and can often resolve issues before they escalate. Establishing that relationship beforehand is smart because you'll have time to find someone you trust rather than hiring whoever is available in a panic. For Listed Transactions, the IRS publishes them in notices and revenue rulings. You can search on irs.gov under "Tax Professionals" then "Listed Transactions" or look up specific Notice numbers. For example, Notice 2004-67 covers certain mineral extraction investments. I'd recommend having any prospectus reviewed against these lists - a qualified tax professional should be able to spot potential red flags quickly. The key is that even legitimate investments can trigger audits if they're structured similarly to previously abusive transactions, so it's all about proper documentation and understanding what you're getting into upfront.

Professional representation absolutely made the difference in my audit outcomes. Having a tax attorney from the start kept communications structured and prevented me from inadvertently saying something that could hurt my case. They also knew exactly which documentation the IRS needed and how to present it effectively. For Listed Transactions, you can search the IRS website directly - they maintain a searchable database. Look for "Abusive Tax Shelters and Transactions" on IRS.gov. The technical publications (Revenue Rulings, Notices) are also worth reviewing, but the main list is pretty accessible. I'd also recommend checking the "Dirty Dozen" tax scams list they publish annually - it often includes investment schemes that sound similar to what's being discussed here. Setting up that professional relationship beforehand is smart. When you're in the middle of an audit isn't the time to be vetting attorneys. Plus, having counsel review any complex investment before you commit can save you headaches later. Think of it as insurance - hopefully you'll never need it, but if you do, you'll be glad you prepared.

Professional representation absolutely made a difference in my audit experience. Having a tax attorney who specialized in the specific issues being examined saved me both money and stress. They knew which battles to fight and which positions were defensible, plus they could communicate with the IRS in ways that kept things from escalating. Regarding Listed Transactions, you can search them on the IRS website under "Abusive Tax Shelters and Transactions." Look for Notice publications and Revenue Rulings. For mineral rights specifically, I'd pay attention to any notices about "son of BOSS" transactions or other partnership tax shelters, as these investment structures sometimes get lumped into broader categories the IRS is watching. The key is understanding that even if your specific investment isn't explicitly listed, if it has similar characteristics to flagged transactions, you could still face extra scrutiny. Having that attorney relationship established beforehand is smart - they can review any investment structure before you commit and help you understand the audit risk profile.

Having professional representation during my audits was absolutely worth it - night and day difference. The tax attorney knew exactly what documentation to present and how to frame the conversation, while I would have probably over-explained and potentially created more issues. I'd definitely recommend establishing that relationship beforehand, especially if you're considering complex investments. For Listed Transactions, you can search them on the IRS website under "Abusive Tax Schemes" or just Google "IRS Listed Transactions" - they maintain a searchable database. Also check out IRS Notice 2004-67 and subsequent notices that describe "Transactions of Interest." One thing I learned is that even if your specific structure isn't explicitly listed, if it's substantially similar to something that is, you could still face challenges. The IRS looks at the economic substance, not just the technical differences. That's why having that legal relationship established early is so valuable - they can help you evaluate whether you're getting too close to problematic territory before you commit.

Having professional representation absolutely made a difference in my audit outcomes. Tax attorneys speak the IRS's language and know which battles to fight versus which ones to concede. I'd definitely recommend establishing that relationship proactively - it's much cheaper to get advice upfront than to hire someone in crisis mode during an audit. For Listed Transactions, you can search the IRS website directly. Go to IRS.gov and search for "Listed Transactions" - they maintain a database that's updated regularly. Also check "Transactions of Interest" and "Reportable Transactions." The publications can be technical, but the summaries usually make it clear what structures they're targeting. One thing I learned: even if your specific investment isn't listed, if it's "substantially similar" to something that is, you could still face penalties. That's another reason why having a tax attorney review these complex structures before you invest is worth the cost.

Professional representation absolutely made a difference in my audit outcomes. Having a tax attorney from the start helped frame the entire process - they knew which documentation to emphasize and how to present our position in ways that aligned with IRS procedures. The cost was significant (about $8K total), but probably saved me much more in penalties and additional assessments. For the Listed Transactions, you can search them on the IRS website under "Abusive Tax Schemes" or "Listed Transactions." They publish periodic updates, and your tax professional should be monitoring these regularly. Also check IRS Notice publications - they often preview transactions that might become "listed" later. One thing I learned: establish that attorney relationship BEFORE you need it. When you're already under audit, you're negotiating from a position of weakness and urgency. Having someone you trust who already understands your tax situation is invaluable for both planning and protection.

Absolutely, having professional representation made a huge difference in my audit outcomes. Tax attorneys speak the IRS's language and know which battles are worth fighting versus when to concede minor points to protect larger positions. I'd definitely recommend establishing that relationship beforehand - it's much cheaper than hiring someone in crisis mode. For Listed Transactions, the IRS maintains them on their website under "Abusive Tax Schemes." You can search by transaction type or browse their periodic updates. They also publish a "Dirty Dozen" list annually of tax scams to avoid. For mineral investments specifically, look for anything involving "leveraged partnerships" or "inflated basis" transactions. The key is that even if your specific investment isn't listed, if it has similar characteristics to flagged transactions, you could still face extra scrutiny. Better to know what red flags the IRS is watching for before you invest rather than after you file.

Professional representation absolutely made a difference in my audit experience. Tax attorneys understand IRS procedures and can often resolve issues without you having to deal directly with agents. I'd recommend establishing that relationship proactively - it's much cheaper to get advice upfront than to hire someone in crisis mode. For Listed Transactions, check IRS Notice 2004-67 and subsequent updates on IRS.gov. You can also search for "Transactions of Interest" notices. The IRS publishes these periodically, and they're surprisingly readable. If you see anything that resembles what you're considering, run the other way. One more tip: if you do move forward with any complex investment, consider getting a written opinion letter from a qualified tax attorney about the structure's legitimacy. It won't guarantee you won't be audited, but it can help demonstrate good faith compliance and may reduce penalties if issues arise.

Having professional representation absolutely made a difference - not just in the outcome, but in my stress level throughout the process. Tax attorneys speak the IRS's language and know which battles are worth fighting. I'd definitely recommend establishing that relationship proactively, especially if you're considering complex investments. For Listed Transactions, you can search on the IRS website under "Abusive Tax Schemes" or check Publication 550 and Notice publications. The IRS also maintains a "Dirty Dozen" list of tax scams they update annually. For mineral investments specifically, look for anything mentioning "abusive tax shelters," "artificial losses," or "inflated basis" - these are common red flags. One thing I learned: even if your specific investment isn't listed, if it shares characteristics with listed transactions (heavy marketing to professionals, guaranteed tax benefits, complex structures), the IRS may apply similar scrutiny. Better to know what you're getting into upfront than be surprised later.

Professional representation absolutely made a difference in my audit outcomes. Tax attorneys understand the process and can communicate with the IRS in ways that often lead to better resolutions. I'd recommend establishing that relationship early - many attorneys offer consultation services to review investment structures before you commit, which is much cheaper than hiring them after problems arise. For Listed Transactions, you can search the IRS website directly. Go to irs.gov and search for "Listed Transactions" - they maintain a current list with detailed descriptions. Also check "Transactions of Interest" which are arrangements the IRS is watching but hasn't yet classified as abusive. The descriptions are technical but usually clear enough to identify if your proposed investment fits the pattern. Another resource is the IRS's "Dirty Dozen" tax scams list they publish annually. While mineral investments aren't typically on there, you can get a sense of what triggers their attention. The common thread is usually investments marketed primarily for tax benefits rather than economic returns.

Having professional representation absolutely made a huge difference during my audits. The tax attorney I worked with knew exactly how to present information to the IRS agent and could speak their language in a way I never could have. More importantly, they helped me avoid saying things that could have expanded the scope of the audit. As for establishing that relationship early - yes, definitely worth it. Many tax attorneys offer initial consultations where you can discuss potential strategies and they can flag issues before you invest. It's much cheaper than trying to fix problems after the fact. For the Listed Transactions, you can search them on the IRS website under "Abusive Tax Shelters and Transactions." The technical term to look for is "reportable transactions" - these include both Listed Transactions and Transactions of Interest. If you're considering any investment that sounds similar to something on those lists, that's a major red flag. The descriptions can be pretty technical, but your tax professional should be able to help you understand if what you're considering falls into any of those categories.