Donovan Legal PLLC provides federal and state tax compliance services to closely-held businesses, partnerships, real estate investment vehicles, and high-net-worth individuals. The firm prepares tax returns and reviews returns prepared by other practitioners, with particular focus on the technical positions, elections, and disclosures that drive both the return outcome and the firm’s related planning and controversy work.

Compliance is the connective tissue between planning and controversy. A position designed in planning has to be reflected on the return; a position reflected on the return is what gets examined if challenged. Mr. Donovan’s combination of CPA and JD credentials, along with thirty years of tax experience, allows the firm to keep these three functions integrated under one practitioner. Clients benefit from a single point of accountability for the technical positions on their returns, without the handoffs between separate planning, compliance, and controversy advisors that introduce gaps in the record.

RETURN PREPARATION

The firm prepares the following federal and state returns:

• Partnership returns — Form 1065 and state equivalents, including Schedules K-1 and K-3, partner basis tracking, § 704(b) book and tax capital account maintenance, and special allocation reporting.
• S corporation returns — Form 1120-S and state equivalents, including basis schedules and reasonable-compensation analysis.
• C corporation returns — Form 1120 and state equivalents for closely-held operating businesses.
• Individual returns — Form 1040 for high-net-worth taxpayers, including pass-through income from investments, real estate activities, and operating businesses.
• Trust and estate returns — Form 1041 for trusts and estates with real estate or pass-through income, and Form 706 federal estate tax returns. The firm handles tax compliance and tax matters arising in estate administration, including for personal representatives of estates with real estate, closely-held business, or partnership holdings.
• State income tax returns — multistate filings, including residency, apportionment, and pass-through entity tax (PTET) elections where available.

REAL ESTATE COMPLIANCE

The firm’s tax compliance work includes the issues that real estate-heavy returns turn on:

• Depreciation and cost segregation — integration of cost segregation studies into return positions, including building component recovery, FF&E classification, and bonus depreciation under § 168(k).
• Like-kind exchanges — Form 8824 reporting for § 1031 transactions, including identification, replacement-period tracking, and basis carryover.
• FIRPTA withholding — Form 8288 and Form 8288-A filings for buyers and other withholding agents, and Form 8288-B withholding certificate applications for foreign sellers seeking to reduce or eliminate withholding before closing.
• Passive activity loss limitations — Form 8582 and grouping elections under § 469, including real estate professional analysis under § 469(c)(7).
• Net investment income tax — § 1411 analysis for real estate income, including the trade-or-business safe harbor.
• Partnership-level elections and disclosures — including § 754 elections, § 743(b) and § 734(b) basis adjustments, and disclosure statements on Forms 8275 and 8275-R where positions warrant.

INTERNATIONAL TAX COMPLIANCE

The firm prepares and files the international information returns and disclosure forms required of U.S. persons with foreign holdings, foreign-owned U.S. entities, and U.S. taxpayers with cross-border activity. Geographic focus mirrors the firm’s broader international tax practice: primarily European Union countries, with additional work in Latin America and the Caribbean.

• Form 5471 — Information Return of U.S. Persons With Respect To Certain Foreign Corporations.
• Form 5472 — Information Return of a 25-Percent Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.
• Form 8865 — Return of U.S. Persons With Respect to Certain Foreign Partnerships.
• Form 8938 — Statement of Specified Foreign Financial Assets (FATCA).
• FinCEN Form 114 (FBAR) — Report of Foreign Bank and Financial Accounts.
• Form 8621 — PFIC information returns and QEF / mark-to-market elections.
• Forms 1116 and 1118 — Foreign tax credit returns for individuals and corporations.
• Forms 3520 and 3520-A — Foreign trust reporting and gifts received from foreign persons.
• FIRPTA forms — Forms 8288, 8288-A, and 8288-B as described above.

The firm also handles international compliance correction matters, including streamlined offshore disclosure procedures for non-willful failures, delinquent FBAR submission procedures, and delinquent international information return submission procedures.

RETURN REVIEW

The firm also reviews returns prepared by other CPAs and accountants. This is a common engagement structure for clients who have a long-standing compliance relationship but want a second look at specific issues including a partnership allocation, a basis calculation, the treatment of a major transaction, or a position taken on a complex return. The firm’s review is scoped to the issues the client identifies and produces a written analysis the client and the original preparer can use.

Review engagements are structured to be additive rather than disruptive. The firm does not seek to displace the existing preparer relationship and works with that practitioner’s file and work papers, with the client’s consent.

COMPLIANCE CONSULTING

Beyond preparation and review, the firm advises clients and their existing tax advisors on discrete compliance questions:

• The proper return position and required disclosures for a particular transaction or structure.
• Method-of-accounting questions, including changes in method under § 481(a) and Form 3115 filings.
• Late or amended returns, qualified amended return procedures, and voluntary disclosures.
• Penalty avoidance through substantial-authority and reasonable-basis disclosures under § 6662 and § 6694.
• Elections and revocations that affect multiple years of return positions.

INTEGRATION WITH PLANNING AND CONTROVERSY

Many of the firm’s compliance engagements arise out of, or feed into, related planning or controversy work. A like-kind exchange planned during the acquisition of a replacement property gets reported on the return for the year of disposition. A partnership audit defended in controversy may require amended returns for prior or subsequent years. A cost segregation study commissioned as part of a development plan determines depreciation reported across the holding period. Where compliance is the natural complement to other work the firm is already doing, the integration is part of the engagement; where it is a stand-alone need, the firm scopes the compliance work accordingly.