For a limited time, get 30% off all Beyond415 products! Get Started

Now is the time to simplify practice and procedure work.

For a limited time, get special pre-tax season pricing of 30% off all Beyond415 products!

Get Started


Knowledge Center

Reasonable compensation

October 30, 2013

IRS focusing more resources on S corporation examinations

By Jim Buttonow, CPA, CITP and Jennifer Villarino, J.D.

Many business owners elect S corporation status to minimize or avoid Social Security and Medicare taxes. Minimal or no S corporation wages allow an individual shareholder to avoid self-employment taxes and may allow the corporation to avoid payroll taxes. Many S corporations are companies with one shareholder whose compensation is determined unilaterally and not in an arm’s-length negotiation. With 60% of the 4.5 million S corporations owned by a single shareholder, the IRS is concerned about S corporation reasonable compensation.

Two recent S corporation compensation cases remind us of the pitfalls and costs of not paying and reporting reasonable compensation to S corporation officers. They also remind us that S corporation reasonable compensation is an active issue in IRS small business examinations.

These cases both involve a single-shareholder business that failed to pay the officer a reasonable wage. The results of these cases were substantial employment tax liabilities and penalties assessed to the employer.

In Glass Blocks Unlimited v. Commissioner, T.C. Memo 2013-180 (August 7, 2013), the U.S. Tax Court addressed an S corporation officer, Fredrick Blodgett, who made distributions to himself from the S corporation and did not pay himself any wages. Blodgett, as president and sole shareholder, worked full time for the company, a distributor of glass blocks used in construction, and performed all the work in generating more than $1.5 million in revenue over two years. In these years, Glass Blocks experienced financial difficulties from the real estate downturn and netted less than $10,000 in total ordinary income. Blodgett did not take any wages from Glass Blocks, nor did he report any income other than the S corporation ordinary income reported on his Form 1040 for the two years in question. During the same time period, the S corporation made distributions to Blodgett of more than $62,000, which Glass Blocks characterized as repayment of loans. With little evidence of loan transactions, the IRS took exception, as it often does in similar situations with closely held corporations. The IRS concluded that the payments from Blodgett were capital contributions and not bona fide loans, and the court agreed. The IRS reclassified more than $62,000 as wages.

The court also agreed with the IRS on the assertion of the failure to file and failure to deposit penalties for the S corporation’s now-delinquent Forms 941 for the periods in question. FICA/Medicare taxes and the resulting penalties amounted to a liability of $13,166 to Glass Blocks.

In Sean McAlary Ltd, Inc. v. Commissioner, T.C. Summary Opinion 2013-62 (August 12, 2013), the U.S. Tax Court heard another S corporation reasonable compensation case. McAlary was entering retirement and decided to supplement his income by becoming a real estate broker. In 2003, he set up an S corporation. In 2004, at the advice of his tax preparer, McAlary set up his annual compensation to be a base of $24,000, plus commissions based on the number of associate brokers with whom he could affiliate his real estate company. Similar to Glass Blocks, McAlary was the sole shareholder of the corporation, its only employee, and the only person in the firm who held a real estate license. McAlary worked long days and performed all of the services essential to managing and operating the business. He contracted with associate brokers to generate sales commissions. In 2006, the S corporation made a net income of $231,454, but did not pay McAlary a salary. However, McAlary did receive transfers totaling $240,000 from the corporation to his personal account. On his Form 1040, McAlary did not report wages from any source, nor did he pay any self-employment tax. McAlary did report his ordinary income from the S corporation.

During the trial, the IRS presented a valuation expert who deemed reasonable compensation to be $100,755 for McAlary, based on median wages for a real estate broker in his area. McAlary contended that compensation should be set at $24,000 – the compensation he agreed to when he set up the business. However, the court gave little weight to this argument because the business never paid McAlary the amount. The court reasoned that the compensation was “forgotten, ignored or adopted as mere window dressing,” rather than resulting from an agreement made during an arm’s-length negotiation. Because the court found portions of the IRS expert’s valuation of reasonable compensation unpersuasive, the court concluded that McAlary’s reasonable compensation was $83,200 annually. Social Security, Medicare, income tax withholding and FUTA taxes of $13,694 were assessed to the corporation.

The IRS also asserted the failure to file and failure to deposit penalties. McAlary attempted to argue the penalties, citing his use of ordinary business care and prudence by engaging and relying on the expert advice of a tax professional in determining compensation. However, the court disagreed and sustained the penalty assessments, stating that McAlary could not provide evidence that his tax professional had the background or expertise to justify reliance on his advice. Although not cited by the court, the fact that the corporation did not actually follow the compensation policy, albeit flawed, likely contributed to the court’s stance that McAlary’s argument was without substance.

These two recent Tax Court cases illustrate IRS concerns about the avoidance of paying reasonable compensation to S corporation officers to avoid FICA and Medicare taxes. The two cases involved companies that paid no wages to officers but reported net income and distributions. With more than 90% of S corporations using a tax professional, clients rely on these experts to guide them in this area. Have you substantively addressed and documented reasonable compensation with your clients? Have you meaningfully determined compensation based on services performed? Would your determination hold up to an IRS valuation of reasonable compensation? Has your client adequately documented loans so that the IRS would not recharacterize the loans as capital contributions and determine the repayments to be wages?

With the IRS focusing more of its resources in the next three years on examinations of S corporations, take a second look at whether your S corporation clients are adequately paying themselves reasonable compensation.

This article originally appeared in the October 2013 edition of the NATP TAXPRO Monthly.

Related Content

Terms of Use


1. Enrollment in the Services

In exchange for any applicable fees (except in the case of a free trial period) and subject to certain limitations as described herein, You will be granted the right to use the applicable Services pursuant to the terms specified during the registration process. Following a successful registration, an online account for the Services will be created for You ("Online Account"), and Your Online Account will consist of one or more individual user accounts ("User Accounts") depending upon Your selections during the registration process.

You are responsible for obtaining and maintaining all computer hardware, software and communications equipment needed to access the Services, and for paying all third-party access charges (e.g., ISP, telecommunications) incurred while using the Services.

Any information that You supply to us will be governed by the terms and conditions of New River's Privacy Policy as it may be updated from time to time.

2. Terms, Fees, and Payments

The terms and conditions set forth in this Section 2 are not applicable to You if You purchased the Services through a third party “Business Partner” authorized by New River to offer the Services.  If You purchased the Services through a Business Partner, the terms and conditions regarding fees and payments will be set forth by the Business Partner. 

Applicable fees, ordering terms, and payments terms for Services are provided on and in this Section 2. Applicable fees may include an annual subscription fee based on the particular Services requested, transaction fees, taxes, and additional fees.

(a) Free Trial Period. New River may offer You a one-time, free trial period during which You can try out a certain portion of the Services for free (a "Free Trial"). The length of any such Free Trial, and the particular Services included may vary from time to time. If You terminate Your subscription prior to the expiration of any Free Trial, You will not have any financial obligation with respect to Your subscription, and Your credit card will not be charged for Your use of the Services. If You terminate Your subscription prior to the expiration of any Free Trial, You will not be entitled to access of any data You created during the Free Trial. Unless terminated by You prior to the expiration of the Free Trial period, if You provided Your credit card information to New River, the Free Trial will convert to Your initial paid subscription at 12:01am on the day following the last day of Your Free Trial (the "Activation Date") and Your credit card will be charged immediately. If a Free Trial is offered by New River, You are entitled to one Free Trial for the Services. If You subscribe to Services after Your Free Trial has terminated, Your credit card will be charged immediately upon registration. Free Trials are also limited to one per credit card. If two customers use the same credit card to subscribe to the Services, only the first customer is eligible to receive a Free Trial.

(b) Initial Paid Subscription. Services are offered for purchase under an annual subscription (e.g. annual contract).  Different payment options are offered for certain annual subscriptions (e.g. monthly, quarterly, or annual payments).  These payment options are subject to change from time to time and at any time under New River’s sole discretion.  If You elect to purchase an annual subscription, You are committing to fulfill a one year contract, even if You select a payment option other than annual.  By registering for or upgrading a Free Trial or CPE Account to a paid subscription for the Services, You agree that You will pay the applicable fees and completely fulfill a one year minimum commitment for the Services that You select upon registration or upgrade for such paid subscription. Your applicable fees will automatically be charged to the credit card You designated as the credit card to be charged for Your account.

(c) Automatic Subscription Renewal. Unless You notify New River of Your decision to terminate Your subscription, Your subscription will automatically renew at the end of each annual subscription term. Your renewed subscription will have the same duration as the subscription being renewed (e.g., one year). At the time of renewal, Your credit card will be charged our then-current fees for the applicable subscription. New River will use commercially reasonable efforts to notify You at Your designated email address at least five (5) days prior to renewal so that You have an opportunity to elect not to renew.

(d) Payment Date. Your credit card will be charged for the renewal term of Your Services on Your payment date ("Payment Date"), based on the type of subscription and the payment frequency that You select upon registration of such paid subscription (e.g., on a particular date each month for an annual subscription that is to be paid monthly; on the anniversary date for an annual subscription that is to be paid annually, etc.). If, however, Your Activation Date is on the 29th, 30th or 31st day of a month, and Your Payment Date does not exist in a particular month because there are fewer than thirty-one (31) days in the month payment is due, Your Payment Date for that particular renewal will be on the next available calendar day and will resume it's normal payment schedule thereafter.

(e) Increases in Subscription. If You elect to increase the number of User Accounts for Your Online Account before the expiration of Your subscription, upon such election, You will be charged a pro-rated, incremental amount for such additional User Accounts (based on the number of days remaining for Your current subscription and the then current subscription fees). This section only applies to increases in the number of User Accounts for the Services, and does not apply to any decrease in User Accounts. To request a decrease in User Accounts, You must send an email requesting such change to [email protected].

(f) Upgrades. If You elect to upgrade Your Online Account before the expiration of Your subscription, upon such election, You will charged a pro-rated, incremental amount for the upgraded subscription (based on the number of days remaining for Your current subscription and the then current subscription fees). This section only applies to Service upgrades to Your Online Account. To request an upgrade in Services, You must indicate this in the "Upgrade" function within Beyond415.

(g) Refunds In the event of a termination of Your annual subscription by You pursuant to Section 3(a) below within thirty (30) days of the Activation Date for Your annual subscription, New River will refund You the entire amount of subscription fees paid by You within that thirty (30) day period, but only if You specifically request a refund by sending an email requesting subscription termination and refund to [email protected]. If You do not terminate Your subscription within such thirty (30) day period, Your subscription fees paid through Your termination date will be nonrefundable.

(h) Credit Card Terms. All payments must be made by a valid credit card that is acceptable to New River. Cash, checks or any other payment form for these subscriptions will not be accepted. You agree to pay all fees and charges incurred in connection with Your subscription (including any applicable taxes) at the rates in effect when the charges were incurred. If New River does not receive payment from Your credit card issuer or its agent, You agree to pay all amounts due upon demand by New River. If Your payment and registration information is not accurate, current and complete and You do not notify us promptly when such information changes, we may suspend or terminate Your account and refuse any use of the Services. If You do not notify us of updates to Your payment method (e.g., credit card expiration date or change in credit card number), to avoid interruption of Your service, we may participate in programs supported by Your card provider to try to update your payment information, and You authorize us to continue processing Your payments with the updated information that we obtain.

(i) Late Payments. Your Online Account may be deactivated without notice to You if payment is past due, regardless of the dollar amount. You agree to pay any outstanding balance in full within thirty (30) days of termination of Your subscription to the applicable Services.

(j) Taxes. Prices exclude all taxes unless stated otherwise. New River collects taxes at the rate in effect at the time Your transaction is completed. If the tax rate changes before a transaction is completed, the new tax rate in effect will apply.

3. Termination

(a) Process for Termination By You. To terminate Your subscription to any of the Services, You must send an email requesting termination to [email protected], or to Your sales representative in the event that You obtained the Services through a Business Partner. 

(b) Early Termination By You. If You terminate Your annual subscription to any of the Services before fulfilling Your annual subscription commitment to make payment(s) for an entire year of Services, the remaining balance of Your annual commitment will be due upon termination, Your Credit Card may be charged for the remaining amount of your annual commitment, New River may pursue collection of this balance from You, Your right to use the Services will terminate, and You will cease to use or have access to the Services.

(c) Termination By Us. You agree that New River, in its sole discretion, with or without prior notice, may freeze or terminate Your use of the Services (or any part thereof) for any or no reason, including, if New River believes that You have violated or acted inconsistently with the letter or spirit of this Agreement. New River may also in its sole discretion and at any time modify or discontinue providing the Services, or any part thereof, with or without notice.  If (i) New River discontinues the Services or modifies the Services in a manner that materially reduces its functionality; and (ii) You wish to terminate Your subscription, then You must send an email requesting termination to [email protected] (or to Your sales representative in the event that You obtained the Services through a Business Partner) within five (5) business days after the earlier of (a) notice to You of such discontinuation or modification, or (b) You logging into Your account after the effective date of such discontinuation or modification.  New River, or its Business Partner, will refund to You a pro-rata amount of subscription fees paid for Services not yet received.  Further, You agree that neither New River, nor its Business Partner, shall be liable to You or any third-party for any interference with or termination of Your access to the Services.

(d) Effect of Expiration or Termination. Upon expiration of Your subscription, or termination of this Agreement, Your right to use the Services will terminate, and You will cease to use or have access to the Services; provided, however, if You are a paid subscriber and You fulfill Your annual commitment, New River will make the data You uploaded in connection with Your use of the Services available to You for a period of thirty (30) days after the expiration or termination of this Agreement via Your User Accounts or other means determined by New River, if requested. Except as described in the immediately preceding sentence, New River will have no obligation to maintain Your data or to provide a file to You, and Your data will be permanently destroyed upon the expiration of such thirty (30) day period.

4. Confidentiality

New River will not disclose, sell, or transfer any confidential information without Your prior written consent, unless required by law. New River will, if indicated within Your preferences, send You reminders and notifications to an email address You specify. New River takes no responsibility for the security of Your Online Account. You agree to hold New River and its successors, assigns, officers, directors, representatives, employees, agents and Business Partners harmless from and against any claim, suit, loss, liability, penalty or damages (including incidental and consequential damages), costs and expenses (including reasonable attorneys' fees and expenses), arising from any breach of privacy or confidentiality resulting from a breach in Your Online Account, hard drive, network, or other medium and/or storage facility to which You may choose to transfer information provided by New River for any use whatsoever.

5. Use of Proprietary Software

You will not, directly or indirectly: (i) reverse engineer, decompile, disassemble or otherwise attempt to discover the source code or underlying ideas or algorithms of the Services or the software used to provide the Services ("Software"); (ii) modify, translate or create derivative works based on the Services or the Software; (iii) rent, lease, distribute, sell, resell, assign, display, host, outsource, disclose or otherwise commercially exploit or otherwise transfer rights to the Services or Software or make the Services or Software available to any third party; (iv) use the Software for timesharing or service bureau purposes or otherwise for the benefit of a third party; (v) remove any proprietary notices or labels on the Software; or (vi) copy, reproduce, post or transmit the Services or Software in any form or by any means, including, without limitation, electronic, mechanical, photocopying, recording or other means. You will make every reasonable effort to prevent unauthorized third parties from accessing the Services through Your User Account. You acknowledge that New River and its licensors retain exclusive ownership throughout the world of all the Services and Software, any portions or copies thereof, and all rights therein, including, without limitation, any suggestions, enhancement requests, feedback, recommendation or other information provided by You or any other party relating to the Services. You further agree to indemnify and hold harmless New River for Your failure to comply with this section.

The Services may only be accessed by using Your User Accounts. The Services and the Software are the property of New River or its licensors and are protected by copyright and other intellectual property laws. New River and its licensors retain exclusive ownership of the Services and the Software, and all intellectual property rights associated therewith. Except as expressly provided herein, You are not granted any rights or license to patents, copyrights, trade secrets or trademarks with respect to the Services, the Software or their contents. New River and its licensors reserve all rights not expressly granted hereunder. You shall promptly notify New River in writing upon Your discovery of any unauthorized use or infringement of the Services or Software (or their contents) or any patent, copyright, trade secret, trademarks or other intellectual property rights of New River or its licensors. The Services and the Software contain proprietary information that is protected by copyright laws and international treaty provisions.

6. Technology Limitations and Modifications to Services

New River will make reasonable efforts to keep Your User Accounts and the Services operational. However, certain technical difficulties or maintenance may, from time to time, result in temporary interruptions. New River will make reasonable efforts to notify You at least twenty-four (24) hours in advance of any anticipated downtime that will exceed one hour.

New River also reserves the right to modify or discontinue, temporarily or permanently, functions and features of the Services with or without notice. New River shall not be liable to You or to any third party for any of the direct or indirect consequences of any modification, malfunction, suspension, discontinuance of or interruption to or of any of the Services.

7. Restrictions and Policies

You will comply with all applicable local, state, national and foreign laws, treaties, regulations and conventions in connection with Your use of the Services, including, without limitation, those related to taxes, data privacy, international communications, and the exportation of technical or personal data from locations other than the location from which New River controls and operates its services. Unlawful activities may include, without limitation, storing, distributing or transmitting any unlawful material, attempting to compromise the security of any networked account or site, or making direct threats of physical harm. You hereby agree to defend, indemnify and hold New River harmless against any claim or action that arises from Your use of the Services in an unlawful manner or in any manner inconsistent with the restrictions and policies stated herein. You agree that you will only transmit materials necessary for IRS practice and procedure, and will not transmit through the Services any unlawful, harassing, libelous, abusive, threatening, harmful, vulgar, obscene or otherwise objectionable material of any kind. In addition, You will not transmit (i) any music or videos (.mp3, mp4., .mpg, .avi etc.), (ii) general system backup files, (iii) photos unrelated to IRS practice and procedure or (iv) executable files.

New River expressly disclaims any and all responsibility or liability for any action by You that is contrary to the foregoing paragraph and reserves the right to terminate Your service immediately for Your failure to comply with any such local, state or federal law.

8. Passwords

You will choose or be given all applicable passwords to use in connection with the Services. You are entirely responsible for maintaining the confidentiality of Your passwords and User Accounts. Furthermore, You are entirely responsible for any and all activities that occur under Your User Accounts, and You will ensure that Your users will logoff from Your User Accounts at the end of each session. New River cannot and will not be liable for any loss or damage arising from Your failure to comply with these requirements or this Agreement.

9. Submissions and Comments

For all comments, feedback, suggestions, ideas, and other submissions disclosed, submitted or offered to New River in connection with the Services, or otherwise disclosed, submitted or offered in connection with Your use of the Services, through any "community" features related to the Services or otherwise (collectively, the "Comments"), You grant New River a royalty-free, unlimited, perpetual, irrevocable, sub-licensable, assignable, transferable right and license, without a right to ever terminate such license, to use the Comments however New River desires, including without limitation, to copy, display, modify, delete in its entirety, adapt, publish, translate, create derivative works from and/or sell and/or distribute such Comments and/or incorporate such Comments into any form, medium or technology throughout the world, in any manner now known or in the future discovered. New River will be entitled to use, reproduce, disclose, modify, adapt, create derivative works from, publish, display and distribute any Comments You submit for any purpose whatsoever, without restriction and without compensating You in any way. You are free to refrain from ever submitting any Comments; however, You cannot terminate this license once You have submitted Comments.

You affirm, represent, and warrant that: (i) You own or have the necessary licenses, rights, consents, and permissions to publish Comments You submit; (ii) the Comments You submit will not contain third party copyrighted material, or material that is subject to other third party proprietary rights, unless You have permission from the rightful owner of the material or You are otherwise legally entitled to submit the material and to grant New River all of the license rights granted herein; and (iii) any Comments submitted by You will not violate the terms in this Agreement or the guidelines set forth in the Community Guidelines (which may be updated from time to time), any right of any third party, including without limitation, copyright, trademark, privacy or other personal or proprietary right(s), will not cause injury to any person or entity, and are accurate, truthful, not misleading, offered in good faith, and lawful.

Unless explicitly and specifically noted within the Content, New River does not endorse any Comments submitted by any user or other licensor, or any opinion, recommendation, or advice expressed therein, and New River expressly disclaims any and all liability in connection with the Comments. New River reserves the right to remove Comments without prior notice.

10. User Files

Your Service subscription may give You the ability to upload, store, access, transmit, and share content, files, folders ("User Files"). When You place a User File in Your shared folder ("User Folder"), that User File becomes available to those users to whom You grant access. Your Service subscription may also give You the ability to send messages to the users to whom You have granted access to the User Files (such messages shall also be considered "User Files" for purposes of this Agreement).

Each type of Client Gateway account includes limited storage. If You exceed the storage quota for Your account, New River will automatically upgrade Your storage maximum storage in ½ gigabyte increments at the rate of $50 per additional ½ gigabyte. You will automatically be charged a pro-rated, incremental amount for the upgraded storage for Your current subscription. Renewals of such upgraded subscription shall be charged at such increased rate.

In order to allow the highest traffic levels compatible with the overall performance of the Services, New River may set bandwidth quotas for User Folders. Your account may be suspended and access to any User Folder denied or restricted, without notice and in New River's sole discretion, in the event that traffic to or from Your User Folders exceeds the bandwidth limits. The parameters of the quotas may be changed without prior notice in order to ensure proper functioning of the Services.

New River does not claim any ownership rights in any User Files that You make available through the Services. However, by making User Files available through the Services, You grant New River the nonexclusive, worldwide, transferable right, on a royalty-free basis, with a right to sublicense this right only to third parties assisting New River in providing the Services to use, copy, distribute and process User Files through the Services on Your behalf and on behalf of Your customers for the purposes of providing You with the Services and administering Your requests, including without limitation, facilitating the secure storage, transfer, and delivery of such User Files.

You represent and warrant that You own or have the necessary licenses, rights, consents and permissions to grant the licenses that Your User Folders require, as described above.

User Files may be protected by intellectual property rights which are owned by the Service user making that User File available via a User Folder. You may not modify, rent, lease, loan, sell, distribute or create derivative works based on the content(s) (either in whole or in part) of another user's User Folder unless You have been specifically authorized to do so in a separate agreement with the rightful owner of that User File.

You acknowledge and agree that New River may establish revised practices and policies concerning access to and use of the User Folders, including without limitation, the maximum size of the User Files that a user may access and use via the Services as contemplated herein, the maximum number of days that User Files will be stored by the Services, the maximum number of times a user may access the Services in a given period of time, and the maximum number of recipients to which a user may send a User File.

You acknowledge and agree that New River will not be responsible for any failure of the Services to store User Files, for the deletion of User Files stored on the Services, or for the corruption of or loss of any data, information or content contained in User Files. You have sole responsibility for all User Files that You upload, store, access, transmit, and share via the Services. Accordingly, You represent and warrant that: (i) You either are the sole and exclusive owner of all User Files that You make available through the Services or You have all rights, licenses, consents and releases that are necessary to grant New River the rights in such User Files, as contemplated under this Agreement; and (ii) neither the User Files nor Your uploading, storing, accessing or transmittal of the User Files, or New River's use of the User Files on, through or by means of the Services, will infringe, misappropriate or violate a third party's patent, copyright, trademark, trade secret, moral rights or other intellectual property rights, or rights of publicity or privacy, or result in the violation of any applicable law or regulation.

11. Continuing Professional Education Courses

Continuing Professional Education (CPE) courses ("CPE Courses") may be offered as part of the Services and may be accessed through either a CPE Account or a paid subscription. Credits for the CPE Courses ("Credits") are available for purchase through the Services, or may be made available to You for free as part of Your Services subscription or promotion, or by other methods.

The following terms and conditions apply to the CPE Courses and Credits:

12. Limitation of Liability; No Warranty; Indemnification

You expressly understand and agree that Your use of the Services is at Your sole risk. The information contained in the Services, and any information that New River provides to You, whether communicated through, in writing, through email, via electronic transmission, verbally, or by any other method ("Content") does not constitute legal or accounting advice and does not constitute written tax advice as defined by IRS Circular 230. All Services are provided on an "as is" or "as available" basis, and New River makes no warranty that (i) the Services, any verbal communication, or any Content are accurate, timely, uninterrupted or error-free; or (ii) any results that may be obtained from the use of the Services or Content will be reliable. OTHER THAN THOSE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, NEITHER NEW RIVER NOR ITS BUSINESS PARTNERS MAKEANY WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE SERVICES OR SOFTWARE, AND WITHOUT LIMITING THE PRECEDING SENTENCE AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, YOU AGREE THAT ANY IMPLIED WARRANTIES SUCH AS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE EXCLUDED FROM THE SERVICES, INCLUDING YOUR ACQUISITION AND/OR USE THEREOF. NEITHER NEW RIVER NOR ITS BUSINESS PARTNERS WARRANT OR MAKE ANY PROMISES ABOUT THE PERFORMANCE, ACCURACY, OR RELIABILITY OF THE SERVICES, OR THEIR ABILITY TO MEET YOUR REQUIREMENTS. THE SERVICES PROVIDED PURSUANT TO THIS AGREEMENT DO NOT REPLACE YOUR OBLIGATION TO EXERCISE YOUR INDEPENDENT JUDGMENT IN USING THE SERVICES PROVIDED PURSUANT TO THIS AGREEMENT. NEW RIVER DOES NOT WARRANT ANY PARTICULAR RESULTS THAT YOU MAY OBTAIN IN USING THE SERVICES PROVIDED PURSUANT TO THIS AGREEMENT.



You agree that New River will not at any time have any additional liability for any claim, cause of action or injury that You or any other person may have as a result of: (1) Your use of, or inability to use, the Services contemplated by this Agreement; (2) Your use of any documents, letters or notices generated by in connection with the Services contemplated by this Agreement; (3) Your use of any information obtained through verbal communication with New River; or (4) Your retention of, or Your failure to consult or retain, an attorney with respect to any contract, document, letter, notice, litigation, negotiation or other legal matter. You agree that the essential purposes of this Agreement can be fulfilled even with these limitations on liabilities. You acknowledge that New River would not be able to offer the Services provided pursuant to this Agreement on an economical basis without these limitations.

You agree to hold New River and its successors, assigns, officers, directors, representatives, employees , agents and Business Partners harmless from and against any claim, suit, loss, liability, penalty or damages (including incidental and consequential damages), costs and expenses (including reasonable attorneys' fees and expenses), arising from or out of: (i) Your breach of this Agreement; (ii) Your violation of any third party right, including without limitation any copyright, property, or privacy right; or (iii) any claim that Your Comments caused damage to a third party.

13. Consent to Electronic Communications

You consent to New River providing You in electronic form any information or notices that New River may be required by law to send to You or that may pertain to the Services provided pursuant to this Agreement, or use of information You may submit in connection with the Services provided pursuant to this Agreement (collectively "Information"). New River may provide Information to You: (1) via e-mail at the e-mail address You designated to New River (if any); or (2) in the course of Your use of the Services provided pursuant to this Agreement, including, without limitation, via a screen or page within or via a link from within to a web page containing the Information.

If Your e-mail address changes, You must notify New River of such change immediately. If You fail to do so, You understand and agree that any communications sent via e-mail shall nevertheless be deemed to have been provided or made available to You in electronic form. You may withdraw Your consent to receive Information by either indicating Your decision within Your Online Account or by making a request in writing to the following address: New River Innovation, Inc., PO Box 10941, Greensboro, NC 27404. Please provide Your physical address and email address to request the change. If You choose to withdraw Your consent to electronic communications, then You may be unable to access certain features or functionality that would otherwise be made available to You.

14. Arbitration

New River and You agree that any claim, dispute or controversy, whether in contract, tort (intentional or otherwise), whether pre-existing, present or future, and including constitutional, statutory, common law, regulatory and equitable claims in any way arising out of or relating to: (1) the Services; (2) advertisements, promotions, or oral or written statements arising out of or relating to the services provided pursuant to this Agreement; or (3) the relationship between New River and You, including the validity, enforceability or scope of this Agreement or any part hereof (collectively, "Claim"), shall be resolved, upon the election of either New River or You, by binding arbitration pursuant to this arbitration provision and the applicable rules of American Arbitration Association or the National Arbitration Forum in effect at the time a Claim is filed. The party initiating the arbitration proceeding shall have the right to select one of these two arbitration administrators. In the event of a conflict between this arbitration provision and the rules of the arbitration administrator, this arbitration provision shall govern. No class actions or joinder or consolidation of any Claim with other persons are permitted in the arbitration without the written consent of New River and You. Any arbitration hearing that You attend will take place in Greensboro, North Carolina. This arbitration agreement is made pursuant to a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16 ("FAA"). The arbitrator shall apply substantive law consistent with (1) the FAA; and (2) except where inconsistent with the FAA, the choice of law provision of this Agreement. The arbitrator's award shall not be subject to appeal, except as permitted by the FAA. Upon request of either party, the arbitrator shall prepare a short, reasoned written opinion supporting the arbitration award. Judgment upon the award may be entered in any court having jurisdiction. Nothing in this arbitration provision shall prevent New River from seeking or obtaining injunctive relief as a result of a violation or threatened violation of this Agreement and any such injunctive action shall not constitute a waiver of the requirement of arbitration for any Claim.

15. Entire Agreement

This Agreement constitutes the entire agreement between New River and You in connection with Your use of the Services provided pursuant to this Agreement, and verbal communication with New River and any Content. New River may update the terms and conditions of this Agreement from time to time by: (i) posting a "change of terms" notice on the Beyond415 application home page, (ii) emailing an updated copy to the most recent email address You have provided to New River, or (iii) without notice to You, and Your subsequent use of the Services provided pursuant to this Agreement, is governed by such new terms and conditions. In the event of termination of this Agreement, all disclaimers and limitations of liability provisions set forth in this Agreement will survive. If any provision is deemed to be unlawful or unenforceable, it will not affect the validity and enforceability of the remaining provisions. The section headings are for convenience only and do not have any force or effect.

16. Miscellaneous

This Agreement is not for the benefit of any third party, whether directly or indirectly (including, if applicable, any user accessing the Services provided pursuant to this Agreement by means of Your Online Account). The failure to exercise in any respect any right provided for herein will not be deemed a waiver of any further rights hereunder. If any provision of this Agreement is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement will otherwise remain in full force and effect and enforceable. This Agreement is not assignable, transferable or sub-licensable by You except with New River's prior written consent. THESE TERMS AND CONDITIONS WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF OR THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS. YOU AND PROVIDER AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN GUILFORD COUNTY, NORTH CAROLINA.


Please wait...

Please wait...

Please answer your security question to continue.
Note: Sharing Beyond415 login credentials is prohibited.

Sign the petition

Commissioner of Internal Revenue
Washington, DC 20224

Mr. Danny Werfel, Acting Commissioner of the Internal Revenue Service:

The petitioners request that the Internal Revenue Service abandon any and all plans to retire the e-Services Disclosure Authorization (DA) and/or Electronic Account Resolution (EAR) products. We request that the Internal Revenue Service continue to provide these e-Services products, retiring them only if the products are immediately replaced by electronic solutions that provide the same functionality provided by the aforementioned products.

The IRS has repeatedly stated that it desires to cooperate with the tax professional community to promote tax compliance.  We, the undersigned, request that you grant our petition to help achieve our mutual goal of serving the American taxpayer with excellence.

This petition is being filed pursuant to the Administrative Procedures Act.