BarbriSFCourseDetails
  • videocam Live Online with Live Q&A
  • calendar_month January 16, 2026 @ 1:00 p.m. ET./10:00 a.m. PT
  • signal_cellular_alt Intermediate
  • card_travel Tax Preparer
  • schedule 110 minutes

Recent IRS S Corporation Initiative: Losses in Excess of Basis, Taxable Distributions, Handling the Examination

$197.00

This course is $0 with these passes:

CPE
ALL
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Description

The IRS has ongoing compliance campaigns targeting S corporations under its Large Business & International Division (LB&I). Of these, basis examinations may be the most problematic for tax practitioners.

The rules for calculating basis are complex but essential for deducting losses. Partners' loans are often used to increase the basis in a partnership. For S corporation shareholders, these rules are not so liberal. The LB&I is aware that some S corporation shareholders deduct losses above basis and perform basis audits of shareholders reporting significant losses. New Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations, is being added to make it easier for the IRS to track shareholder basis.

Additionally, the IRS is also focusing on another area of noncompliance, distributions to shareholders that should be taxed, including distributions that are dividends, distributions of appreciated property, and distributions in excess of basis.

With S corporations under such scrutiny, tax advisers working with Subchapter S corporations must properly report basis, distributions, and built-in gains. Tax practitioners must not only grasp how to tax S corporation shareholders properly; they must also understand how to represent these taxpayers throughout an IRS examination.

Listen as our panel of S corporation experts reviews the current IRS focus on S corporation shareholders, including audits of basis, distributions, high net worth taxpayers with flow-through entities, and built-in gains, including documenting and complying with current guidelines properly.

Presented By

David J. Warner
Tax Attorney, Shareholder & Managing Principal
Holtz, Slavett, Drabkin & Warner

Mr. Warner is a Tax Attorney and Shareholder with Holtz, Slavett, Drabkin & Warner and the Managing Principal of the firm’s Orange County office. He has over 16 years of experience practicing in all aspects of tax controversy including tax audits, collection defense, and litigation in the U.S. Tax Court, U.S. District Court, and the Court of Federal Claims. Mr. Warner represents taxpayers in cases involving income tax, estate tax, gift tax, employment tax, collection issues, innocent spouse, penalties, and bankruptcy tax issues. He also represents taxpayers before the California Franchise Tax Board (FTB), California Department of Fee and Tax Administration (CDTFA, formerly State Board of Equalization (BOE)), and California Employment Development Department (EDD). Mr. Warner has particular expertise in complex tax litigation in U.S. Tax Court and U.S. District Court, as well as substantive tax matters such as audits of partnerships and S corporations and offshore tax compliance issues, including the Report of Foreign Bank and Financial Accounts (FBAR), civil fraud, and offshore information return penalties. He also speaks extensively to groups of attorneys and accountants on IRS tax procedure and substantive tax topics.

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Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Date + Time

  • event

    Friday, January 16, 2026

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

I. IRS' S corporation campaign

II. Distributions to shareholders

III. Losses in excess of basis

IV. Shareholder debt reporting on Schedule K-1

V. The examination process

The panel will review these and other key issues:

  • Whether loans can be used to increase an S corporation shareholder's basis
  • How built-in gains are calculated and taxed
  • How to calculate and document shareholders' basis in S corporations
  • What increases a shareholder's chance of being selected for an audit?
  • How can taxpayers best prepare for an IRS examination of S corporation records?

Learning Objectives

After completing this course, you will be able to:

  • Establish the impact of the IRS compliance campaign on S corporations
  • Determine how to calculate and document shareholders' basis in S corporations
  • Recognize the IRS' focus on accumulated earnings and profits
  • Ascertain whether an S corporation is at risk of being found in noncompliance with IRS audit focal points
  • Decide which S corporation records are needed to respond to an IRS audit of an S corporation
  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.


BARBRI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

BARBRI CE webinars-powered by Strafford-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .