Business and Tax Considerations for Solo Practitioners and Small Law Firms
By David W. Klasing, Esq. M.S.-Tax CPA
Entrepreneurial attorneys going solo often overlook the importance of effectively planning for the tax consequences of opening their own practice. Very often attorneys go into practice without even considering the tax consequences, and are surprised by the unwelcome tax bill they receive from the IRS as well as the Franchise Tax Board.
With a little planning and effort attorneys can make the tax system work for them, not against them. By implementing and considering the issues discussed in this pamphlet, attorneys could minimize the amount of tax paid, and make a firm more profitable.
Choice of Entity Considerations:
The choices open to attorneys are endless. It is very important that attorneys consider all factors when choosing an entity for their practice, including: Number of partners, gross receipts, number of employees, whether fringe benefits will be paid to employees, and many more.
a. Sole Proprietorships
Because no corporate entity or other legal device is employed to operate the day to day business, sole proprietorships are very popular with solo practitioners. The sole proprietor files his taxes on Schedule C on his individual income tax return. If the attorney will have employees, he/she will need to obtain a Federal Identification Number(FIN) from the IRS. The sole proprietor is also required to pay estimated tax during the year.
Solo practitioners should be aware of the risks involved in operating as a sole proprietor. The largest risk is that the sole proprietor has liability for all of the business debts and any legal issues which may present itself. Unlike other forms of business, there is no limit on liability, and the sole proprietor’s personal assets are subject to seizure in the event of an unfavorable judgment.
Two forms of partnerships exist: The General Partnership and the Limited Partnership.
General partners have no corporate or legal formalities. Two people choosing to operate a business together would be considered a partnership for tax purposes. A partnership is required to file a Form 1065 tax return. The profits of the partnership flow through to each partner, and each partner’s share of profits and losses is reported on Schedule K-1.
General Partners also have risk of exposure to the debts and liabilities of the business. General partners are jointly and severally liable for all the partnership obligations. Therefore it is not advisable for two or more practitioners to operate a law firm as a general partnership.
Although Limited Partnerships have the same general structure as General Partnerships, there are some significant differences that make Limited Partnerships a better choice for smaller firms. The biggest advantage is the limited liability it offers each limited partner: You are only liable to the extent of the money contributed to the partnership. A limited partnership must have at least one general partner. In order to avoid the potential risk of unlimited liability, many attorneys choose to have the general partner be a corporation. This allows the General partner in the Limited liability partnership to have limited liability as well.
The Formation of a limited partnership requires more formalities than that of a general partnership. A certificate is required to be filed with the Secretary of State, and there is also a franchise tax of $800 involved. The partnership profits will still flow through to the partners, and the partners will still report their distributive share of partnership income/losses on their individual tax returns.
c. Limited Liability Companies
Limited Liability companies have become a very popular formation vehicle for many attorneys and other business in general. The reason that LLC’s are so popular is its flexibility in choosing the form in which it will be taxed, while at the same time providing the limited liability that attorneys desire. The LLC may choose to be taxed as a Corporation, or a partnership.
The filing requirements for an LLC are more complex than that of partnership. Besides filing articles of organization, the LLC would need an operating agreement, and would also need a statement of information to be filed with the Secretary of State. An $800 franchise fee applies to the LLC as well.
Like the Limited Liability Company, an S-Corporation has flexibility to choose whether it would like to be taxed as a partnership or a corporation. However, even if the S-Corp chooses to be taxed as a partnership, it still has to comply with the corporate formalities. In other words, the S-Corporation has to comply with the bylaws, articles, stock and shareholder requirements of a regular Corporation. The S-Corporation also has restrictions: The S-Corporation must be a domestic Corporation, and no foreign shareholders are allowed. The S-Corporation also may not have more than one class of stock and may not have more than 100 shareholders.
A Corporation is taxed as a separate entity. Income earned by a Corporation is subject to double taxation- Once at the corporate level, and once at the shareholder level. The double taxation is often a deterrent for solo practitioners to incorporate.
However, Corporations arguably offers the greatest protection from liability. A practitioner may also pay himself a salary to offset the amount of profits subject to double taxation. One major advantage of the corporation is the ability to accumulate earnings. A corporation does not need to distribute its profits when it is earned. It may retain $250,000 of earnings without it being subject to double taxation.
Method of Accounting
Two types of accounting methods are available: Cash basis method and Accrual method.
In the cash method accounting, the lawyer will report income when it is actually received, and expenses when they are actually paid. An item is considered actually received when a person has possession and control of the income.
In the cash basis method, a person has to also report an item as income if the item is constructively received. An item is constructively received when the income is credited to your account, set apart for you, or otherwise made available to you.
The doctrine of constructive receipt is designed to prevent a taxpayer from deferring income by choosing the year in which to reduce an item of income to possession.
Under the cash basis method, a person also generally deducts expenses when they are actually paid. However, a cash basis method taxpayer is required to capitalize certain expenses. If the useful life of the item purchased is more than 12 months, the item is considered a capital asset. For example, if you bought a car or a computer for the firm in the first year, car or computer will be considered a capital asset, since its useful life is more than 12 months. The person may then depreciate the item over the life of the asset.
The accrual method of accounting is more complex than the cash method. An item is reported in income when a person has the right to receive income, as opposed to actually receiving the income as in the cash basis method.
To determine when a person has the right to receive income, the all events test is used. When (1) all the events have occurred that fix the taxpayer’s right to receive the income; and (2) the amount can be determined with reasonable accuracy, the item is included in income.
A deduction is generally taken into account for tax purposes in the year which all events have occurred to establish the fact of the deduction, the amount can be determined with reasonable accuracy, and economic performance has occurred with respect to the liability.
Minimizing Tax Liability through Effective Tax Planning
a. Start-up Expenses
Starting your own law firm can be a very expensive endeavor. Just the thought of all the costs that go into operating your own firm, and the financial strains and concerns that go along with it deters many attorneys from opening up their own practice.
However, the impact of the financial burden of opening your own firm can be softened by using some very valuable tax opportunities available to you. If start up expenses results in a profitable business, a practitioner may choose to either currently deduct a portion of the costs of the start up expenses, or may amortize the costs over an 180 month period.
Generally, the first $5,000 of startup expenses can be deducted. The deduction starts to phase out and is reduced if the firm makes over $50,000. The remaining amount of startup expenses can be deducted over the next 15 years, which will be a valuable tax minimizing deduction over the next 15 years.
b. Capital Expenditures
Capital expenses are expenses that are not currently deductible. But that can be deducted over the useful life of the assets.
Examples of capital assets include the following:
- Costs of acquiring, constructing, or erecting buildings, machinery and equipment, furniture and fixtures, and similar property having a useful life substantially beyond the tax year.
- Amounts expended for securing a copyright and plates that remain the property of the person making the payments.
- Costs of defending or perfecting title to property.
- Amounts expended for architect’s services;
- Commissions paid in purchasing securities.
- The cost of goodwill in connection with the acquisition of the assets of a going concern.
c. Deductible Compensation and Employee Benefits
A law firm may deduct all expenses related to paying salaries, wages commissions, bonuses or any other amounts paid to employees. As like with any other business expenses, to be deductible, compensation most be an ordinary and necessary expense, reasonable and actually paid.
Employee benefits are also a separate deduction.
d. Health Care Tax Credit
An eligible small employer may claim a tax credit in tax years beginning after 2009 if it makes nonelective contributions that pay for at least one-half of the cost of health insurance premiums for the coverage of its participating employees.
The employer must make nonelective contributions through an “arrangement.” In the case of a tax year beginning in 2010 through 2013, the arrangement must require an employer to make a nonelective contribution on behalf of each employee who enrolls in a qualified health plan offered by the employer in an amount equal to a uniform percentage, but not less than 50 percent, of the premium cost of the plan. An employer contribution is considered a nonelective contribution so long as it is not made through a salary reduction arrangement.
The Health Care Tax Credit is subject to a phase out based on number of staff and average salary.
The Health Care Tax Credit is a valuable tool for attorneys. Any solo practitioner or firm would be eligible for this credit as long as they are considered an eligible small employer. A employer is a small employer if:
- the employer has 25 or fewer full-time equivalent employees;
- the average annual wages of these employees is not greater than twice the applicable dollar amount for the tax year ($25,000 in tax years beginning in 2010 through 2013); and
- the employer has a qualified health care arrangement in effect.
e. Retirement Contributions
Once a firm starts to grow, many lawyers starts thinking about offering their employees employee benefits. One of the most popular employee benefits is participating in a retirement plan, and the employer making contributions to the retirement plan. There are two basic types of deferred compensation plans -qualified plans and nonqualified plans.
Qualified plans have more tax advantages over nonqualified plans. Employees are generally not taxed on the employer’s contributions to a qualified plan until the plan benefits are actually distributed to them. In addition, the employers may generally deduct the contributions to a qualified plan in the year in which the contributions are paid. However, qualified plans are more complex than nonqualified plans and the stringent requirements that qualified plans must satisfy result in higher administrative costs for the employers to maintain these plans.
Basic Recordkeeping Requirements
In general, attorneys need to keep all records related to the determination of their tax liability. While the Statute of Limitations for the Internal Revenue Service to audit a person is generally three years (subject to fraud and other exceptions) it is suggested that an attorney or firm keep their financial records for at least 10 years.
Surviving a Tax Audit
One of the most frightening experiences in a business, even for attorneys, is getting a letter from the Internal Revenue Service saying that you are under audit. The first thing that comes to mind is: Did I do something wrong? Will I owe the government money? Some people are even concerned that they may go to prison.
Even though attorneys are usually skilled at solving problems, an audit can be a complex maze, and attorneys should be familiar with the basic procedural aspects of an IRS audit.
a. Type of Audits
Generally there are three types of audits:
- Correspondence Audit
- Office Examination Audit
- Field Examination Audit
In a correspondence audit, a taxpayer receives IRS correspondence by mail, with either a notice of proposed changes based on a tax return not having the same information as the Internal Revenue Records, or a document request asking for substantiation of items claimed on a tax return. These audits usually require a taxpayer to respond to the notice received within 30 days.
In an office audit, a taxpayer will also receive a letter from the IRS in the mail, requesting the taxpayer to setup an appointment and bring certain records with him to the audit.
In a field examination audit, a Revenue Agent will conduct the audit at the taxpayers home or place of business.
b. IRS Examination Procedure
The Internal Revenue Service has specific Audit Techniques used to audit different professions. In order to provide guidance to their examiners, the IRS issues Audit Technique Guides (ATG’s) for specific industries. The IRS has a ATG specifically tailored to attorneys.
The audit technique guide expects attorneys to keep the following records:
- Appointment book;
- Client card index;
- Receipts Journal or Daily log;
- Disbursements journal, book or other record reflecting the breakdown of regular expenses paid from bank accounts as well as disbursements made from client trust funds. These disbursement records should provide a mechanism from which disbursements chargeable to a specific client can be noted on their records for billing purposes. The attorney may also maintain a petty cash journal;
- Accounts Receivable journal showing billed receivables;
- Individual client accounts including a description of services rendered, charges and credits, a summary of unbilled charges and work in progress, and final invoices;
- Case time records per client;
- Register of cases in progress, oftentimes organized by client’s name; and
- Time summary reports, sorted by attorney and by client, listing the time, dates of work, billings and/or charges.
The guide further states that “Examiners can test the validity of reported income by comparing and reconciling the data provided on the above listed reports.”
One of the most common issues raised on audits for attorneys are client costs and advances. The IRS takes the position (and case law supports the position) that “
“Lawyers who advance court costs on behalf of their clients cannot deduct the costs as business expenses where the client is ultimately responsible for payment; such advances are treated as loans, not expenses.”
c. Representation- Circular 230 Practitioner
The Internal Revenue Service allows a taxpayer to be generally represented by either an attorney, certified public accounts, or an enrolled agent.
d. Criminal Investigation Division
If the original auditor or tax examiner determines that a taxpayer willfully attempted to evade taxes, the taxpayer’s case may be referred to the IRS Criminal Investigation Division. The case will then be assigned to one or more special agents.
The agent then asks the taxpayer to cooperate and to begin that cooperation by submitting to an interview. If the taxpayer submits to the interview, the agent will ask wide-ranging, open-ended questions intended to elicit as much general and specific information as possible about the taxpayer, his personal and business financial affairs and the like. The agent wants to get the taxpayer talking. It is surprising how many taxpayers, out of guilt or for other reasons, submit to the full-length questioning by a special agent merely upon presentation of the agent’s credentials. Indeed, the agent times the interview to try to catch the taxpayer when he is most vulnerable, and when he is least likely to call an attorney.
In many cases, the taxpayer, by submitting to an interview, seals his own fate and, in effect, talks himself into a conviction. Even a false or misleading statement can and will haunt the taxpayer. Material false statements that are made knowingly or willfully are violations of the United States Code. There is no safe approach to any question from a special agent. Almost any answer can either impeach or convict at the very least. About the only ways a taxpayer can answer an agent’s questions in a criminal investigation without further damage are: (1) to tell the truth (which can in fact damage the taxpayer if he has committed tax fraud) or (2) decline to answer.
e. IRS Appeals
Taxpayers who wish to contest tax liabilities or adverse determinations proposed against them by the IRS may use an administrative appeals procedure. The Appeals Division of the IRS administers the appeals procedure. A taxpayer may appeal a wide range of issues, including federal income, gift, and estate taxes; employment and excise taxes; penalties; and adverse tax-exempt rulings. Appeals does not have jurisdiction over specified classes of cases. The Commissioner of the IRS is required to develop and implement a plan to reorganize the IRS that replaces geographic regional divisions with units serving groups of taxpayers with similar needs. Administrative appeals do not preclude a taxpayer from proceeding in the Tax Court or filing a refund claim. A taxpayer may, for example, initiate an appeal before filing a Tax Court petition, or he can forgo an immediate appeal, wait to receive a statutory notice of deficiency, and then file the Tax Court petition. He generally then has the opportunity to settle the case with Appeals before trial. On the other hand, the taxpayer may pursue an administrative appeal, and if dissatisfied with the outcome, pay the deficiency and file a refund claim. A taxpayer may initiate an appeal within 30 days after receiving notice from the IRS of his right to appeal. Special appeals procedures apply to taxpayers in bankruptcy or receivership proceedings and to partners. In specified cases, a taxpayer must file a written protest to initiate an appeal. Taxpayers may request early referral of issues to Appeals.
Both the taxpayer and the IRS may make concessions to reach a settlement. An issue that would have to be decided one way or the other in court, for example, whether or not a specific expense is a business expense, can be compromised to a specified dollar value as part of a settlement. Appeals officers cannot settle cases based on their nuisance value. The IRS tries to settle related cases in a consistent manner and attempts to avoid whipsaw situations. A settlement between a taxpayer and an Appeals officer is not binding until it is approved by a superior of the Appeals officer. Agreements are made on forms issued by the IRS. Settlements not based on mutual concessions by the taxpayer and the IRS do not prohibit a later refund claim. However, settlements that are based on mutual concessions may estop the taxpayer from later claiming a refund. A taxpayer may request a closing agreement as part of a settlement.
f. Tax Court Procedures
The Tax Court operates under its own Rules of Practice and Procedure (the rules) and under the Federal Rules of Evidence applicable in trials without a jury in the U.S. District Court of the District of Columbia. If there is no applicable Tax Court rule in a given instance, the court or the judge before whom a matter is pending may prescribe the procedure, giving particular weight to the Federal Rules of Civil Procedure to the extent that they are adaptable to the matter at hand. This latitude includes the power to correct clerical errors. The Tax Court rules and amendments of existing rules generally will take effect only after the public has been given notice and an opportunity for comment.
The Tax Court has adopted amendments to its Rules of Practice and Procedure, including Forms, concerning privacy and public access to electronic case files. Though the Court is not specifically covered by the E-government Act of 2002 (P.L. 107-347) and its amendment by P.L. 108-281, the Court has decided to voluntarily comply with the provisions of these Acts. Effective as of March 1, 2008, the Tax Court Rules and Forms amendments provide that Form 4, Statement of Taxpayer Identification Number, must be filed with any Tax Court petition. The requirement that the petition contain the taxpayer’s identification number has been removed. Form 4 will be provided to the IRS, but it will not be a part of the Court’s file in the case.
Unless otherwise directed by the Court, only parties to a Tax Court proceeding and their counsel may have remote electronic access to any part of the case file maintained by the Court in electronic form. This amendment regarding remote access to electronic files by parties and their counsel will be effective at a future date to be announced by the Court, pending completion of registration for electronic access of over 63,000 Tax Court practitioners. Effective as of March 1, 2008, any other person may have remote electronic access only to the docket record and any Court opinion or order, but may have electronic access at the courthouse to the entire public record maintained by the Court in electronic form.
The Administrative Procedure Act does not apply to the Tax Court
Tax Advantaged Retirement Options
A business seeking to provide a retirement plan for its employees faces a dizzying array of choices. An individual (whether he is a business owner or employee) faces a slightly different, but similarly broad set of options. Some retirement plans are intentionally given preferential treatment under portions of the tax code designed to encourage retirement savings; others (typically known as nonqualified deferred compensation arrangements) take advantage of provisions of the tax code that are not specifically designed for retirement plans.
a. Life and Health Insurance
Group-term life insurance is a common benefit among larger employers and remains primarily an employer-paid program. Often, the benefit is divided into an employer-paid portion known as basic group-term life insurance and an optional, employee-paid benefit. The employer-paid portion commonly pays every employee the same basic benefit whether it is a flat dollar amount (such as $10,000) or a percentage of salary (such as one times salary). The optional portion generally is a percentage of salary. There may be underwriting required if an employee signs up for a benefit that exceeds the dollar maximum established by the insurance company. However, the majority of coverage will be issued on a group basis and avoid individual assessments of health. Underwriting may also be required if an employee signs up for the benefit after a deadline has passed or did not sign up when initially eligible.
Group-term life insurance benefits provided by employers are deductible by the employers and excludable from the income of employees up to a face amount of $50,000. Beyond that amount, employers may still deduct the premiums as a business expense, but employees will have to include the amount in gross income unless they pay for the coverage with after-tax dollars.
b. Simplified Employee Pensions (SEP’s)
A simplified employee pension (SEP) is an IRA-based retirement plan, under which an employer makes contributions to IRAs established on behalf of each of its employees ( Code Sec. 408(k)). For 2011, annual contributions by an employer to a SEP are excluded from the employee’s gross income to the extent that the contributions do not exceed the lesser of: (1) 25 percent of the participant’s compensation or (2) $49,000 ($50,000 for 2012). If the employer exceeds the annual limit on contributions, the employee is generally taxed on the amount of the excess contribution. In the case of a SEP established by an unincorporated employer, the compensation of a self-employed participant (partner or proprietor) is earned income. Plans covering self-employed participants are generally discussed at.
In order to deduct its SEP contributions for a particular year, the employer must make the contributions by the due date (including extensions) of its tax return for that tax year (Code Sec. 404(h)). The contributions are made to the SEP-IRAs that have been established by, or for, each eligible employee.
Although the employer’s deduction cannot exceed 25 percent of the employee’s compensation, any excess can be carried over and deducted in later years subject to the percentage limitation. In addition, when an employer maintains another type of defined contribution plan, the contributions to a SEP must be taken into account when determining compliance with the annual limit imposed on deductible contributions to the plans( Code Sec. 404(h)(2)).
The employer must decide each year whether and how much to contribute to a SEP plan. If any contribution is made to a plan, nondiscriminatory employer contributions must be made for each employee who: (1) has reached age 21, (2) has performed services for the employer during at least three of the immediately preceding five years, and (3) received at least $550 of compensation for 2011 (to remain the same for 2012) from the employer for the year. Unlike traditional IRAs, the account owner of a SEP-IRA can make contribution after reaching age 70 ½.
c. Individual Retirement Accounts(IRA’s)
Individuals with compensation can contribute to individual retirement arrangements. Some individuals may deduct their contributions to traditional IRAs. To contribute to a Roth IRA, an individual must receive compensation and have adjusted gross income below a set level. Contributions to Roth IRAs are never deductible. Distributions from Roth IRAs may be exempt from tax under certain conditions, whereas distributions from all other IRAs are taxed similarly to distributions from other qualified plans.
The deduction for traditional IRAs is phased out as income increases for individuals who are active participants. Deductible contributions can be made to a spouse’s IRA, even if the spouse has no compensation for the year. Individuals can also make nondeductible contributions to traditional IRAs. The amount is limited to the annual applicable dollar limit less any deductible contributions made. The amount of allowable contributions to a Roth IRA is limited to the applicable dollar limit (e.g., $4,000 for 2005 and 2006) and is reduced by the amount of deductible and nondeductible contributions made to traditional IRAs. Thus, the total annual amount that can be contributed to all IRAs cannot exceed the applicable dollar limit.
A 401(k) plan is a type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pretax basis. Generally, these deferred wages (commonly referred to as elective contributions) are not subject to income tax withholding at the time of deferral, and they are not reflected on your Form 1040 since they were not included in the taxable wages on your Form W-2. However, they are included as wages subject to social security, Medicare, and federal unemployment taxes.
The amount that an employee may elect to defer to a 401(k) plan is limited by the Internal Revenue Code. In addition, your elective contributions may be limited based on the terms of your 401(k) plan. Distributions from a 401(k) plan may qualify for optional lump-sum distribution treatment or rollover treatment as long as they meet the respective requirements.
Many 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employees’ elective contributions only, and do not include any income earned on the deferred amounts. Hardship distributions are not treated as eligible rollover distributions.
Distributions received before age 59 1/2 are subject to an early distribution penalty of 10% additional tax unless an exception applies.
e. Defined Contribution Plans
Defined contribution plans have become very successful in recent years. In a defined contribution plan, a certain amount of money is set aside for the employee’s of the firm each year. This is seen as a benefit that gives the employee an incentive to stay with the firm for the long term, as there are vesting rules tied to these plans.
i. Stock Bonus Plans
For many years, the Internal Revenue Code has included “stock bonus plans” among those plans that may qualify for favorable tax treatment. IRS Regulations define a stock bonus plan as:
“… a plan established and maintained by an employer to provide benefits similar to those of a profit-sharing plan, except that the contributions by the employer are not necessarily dependent upon profits and the benefits are distributable in stock of the employer company.” ( Reg. §1.401-1(b)(2)(iii)).
A stock bonus plan, then, is generally governed by the same rules applicable to a profit-sharing plan. The only difference is that benefits are distributable in stock of the employer company.
As in the case of profit-sharing plans, there must be a definite predetermined formula for allocating contributions among the participants. No formula for determining the amount of contributions is required.
In order to be a qualified plan, a stock bonus plan, in addition to meeting the requirements that must be met by any plan, must meet special distribution requirements set forth in Code Sec. 409(h) and Code Sec. 409(o) and must generally satisfy the pass-through voting requirements of Code Sec. 409(e).
ii. Employee Stock Ownership Plans
Employee stock ownership plans (ESOPs) are stock bonus plans or combination stock bonus plans and money purchase pension plans. ESOPs can be divided into two main types: the nonleveraged or basic ESOP and the leveraged ESOP. They are designed to invest in qualified employer securities and may use borrowed funds to obtain those securities. Qualified participants have the right to direct reinvestment of part of their accounts. Distributions from employee stock ownership plans are subject to same timing and tax rules that apply to other defined contribution plans. ESOPs cannot be integrated with social security.
A basic or nonleveraged ESOP is essentially a stock bonus plan that qualifies as an eligible individual account plan under the Employee Retirement Income Security Act of 1974 (ERISA). It operates like a profit-sharing plan in which the benefits must be invested primarily in employer securities. Under the basic ESOP, the employer deposits company stock or cash to buy company stock into a trust. The employer receives a tax deduction for the contribution to the ESOP and employees do not pay tax until they receive and sell their shares. Unlike leveraged ESOPs, the plan cannot borrow money to acquire the employer securities.
Under a leveraged ESOP, the plan borrows money with which to purchase the employer’s stock, and the loan is secured by the stock and typically guaranteed by the employer. The plan repays the loan with cash contributions made each year to the plan by the employer. Contributions are ordinarily not based on profits, but rather are fixed, as in money purchase plans. This insures that the loan can be repaid with tax-deductible dollars even though the employer may be without profits in a particular year. Each year, as employer contributions are made to pay off the loan, the stock purchased by the plan is assigned to the employee participants, who are entitled to the full value of the account when they retire or die.
ESOPs must comply with the qualification requirements imposed on other qualified defined contribution plans.
 Ross v. C.I.R. 169 F2d 483 (1st Cir) 1948
 Reg §1.446-1(c)(1)(ii)
 Reg §1.446-1(c)(1)(ii)
 U.S. Master Tax Guide (2012), 1333. Small Employer Health Insurance Credit
 See I.R.C. 45R
 See I.R.C. 45R
 IRS Attorneys Audit Technique Guide, Chapter 1.
 This excerpt was taken from CCH Tax Practice Guide, §1021, How CID Investigates a Case
 18 U.S.C. §1001
 Excerpt taken from CCH Tax Research Consultant, IRS: 24,000, Overview-Administrative Tax Appeals
 Excerpt was taken from CCH Tax Research Consultant, LITIG: 6,058, Tax Court Rules
 Excerpt taken from CCH Tax Research consultant, RETIRE:100, Fundamental Concepts: Retirement Plans
 Excerpt taken from CCH Employee Benefits Analysis, 34,030, Group Term Life Insurance
 Excerpt taken from U.S. Master Tax Guide, 2156, Simplified Employee Plans
 Excerpt taken from CCH Tax Research Consultant, RETIRE: 66,000, Overview-Individual Retirement Arrangements
 Excerpt taken from IRS Taxtopics, Topic 424- 401(k) plans
 Excerpt taken from the Standard Federal Tax Reporter (2012), 17,510.01, Stock Bonus Plans
 Excerpt taken from CCH Tax Research Consultant, RETIRE: 75,000, Overview-Employee Stock Ownership Plan(ESOPs)