Free Tax Audit Tool
Find Your Tax Leaks
Answer 10 quick questions. We'll estimate how much your business may be overpaying in taxes — and where the biggest leaks are.
Where practices overpay, answered
What a tax leak actually is, the ones that recur most often in owner-operated practices, and how far back they can be recovered.
What is a tax leak?
A deduction, election, or structure the business was entitled to use and did not — tax paid that the law never required. It is the opposite of an aggressive position: nothing about closing a leak depends on a debatable reading of the code, which is why leaks tend to persist quietly for years. They usually trace to a compliance-only relationship where someone prepared an accurate return from the facts as given and no one asked whether the facts could have been arranged better.
What do owner-operated practices most often overpay on?
In rough order of frequency: operating without an S-corp election past the point it would pay for itself, or with one whose owner salary was never revisited; retirement plans left unfunded or funded well below capacity; equipment and leasehold improvements never analyzed for available depreciation treatment; and out-of-pocket costs paid personally that an accountable plan could have reimbursed tax-free. None of these are exotic — they are ordinary provisions that require someone to look before year-end.
Can tax overpaid in prior years be recovered?
Sometimes, by amending. The general federal window for claiming a refund runs three years from the filing date or two years from when the tax was paid, whichever is later, so recent years are often still open while older ones are not. Whether amending is worth it depends on the size of the item and whether the amendment invites scrutiny of other positions on the same return — a question to work through with your CPA rather than a default action.
Is proactive tax planning risky?
Planning and aggressive positions are different things. Choosing an entity structure, funding a qualified plan, setting defensible compensation, and timing a purchase are ordinary uses of provisions written to be used. Risk enters when a position lacks substantiation or economic substance, or depends on a characterization the facts do not support. The distinguishing question is whether the position would still look reasonable to a third party reading the file.
Does changing CPAs actually fix this?
Only if the service model changes with it. Most leaks are not caused by a lack of technical skill — they are caused by an engagement that begins in February and ends in April, when nearly every meaningful decision had to be made during the year that already closed. What closes leaks is someone looking at the numbers before December, not a more talented preparer looking at them afterward.