Stop Overpaying the IRS: 3 Little-Known Codes That Save Six Figures

Why most advisors miss these opportunities — and how to fix that today.

By Dan Hatcher
May 1, 2025

Let's cut to it: most high-income earners and business owners are overpaying the IRS — often by six figures — and they don't even know it.

If you're a top performer earning real money, there's a good chance your CPA is doing exactly what they were trained to do: file your return. But filing isn't strategy. And it's not defense.

The result? You get clobbered year after year because the IRS code is working against you — not for you.

Here are three IRS-approved strategies that the elite use to legally reduce their tax bill. Most advisors won't bring them up. I will.

1. Section 280A: The Augusta Rule

This gem allows business owners to rent their primary residence to their business for up to 14 days per year — and receive that rental income tax-free.

Why it works:
  • You can write off the rental as a business expense.
  • The income isn't reported on your personal return (if done correctly).
How most CPAs miss it:
  • It's not in TurboTax.
  • If your CPA doesn't specialize in high-income strategy, they're likely ignoring it.
Potential savings: $5,000–$15,000 annually with proper documentation.

2. Section 139: Disaster Relief Payments

Under this code, employers (even yourself if you own the company) can make tax-free payments to employees for "qualified disasters" — including COVID, hurricanes, or even economic disruptions.

Why it matters:
  • The payments are deductible to the business.
  • The recipient pays no income tax on the money.
Most business owners didn't even know this existed during COVID — or that it can be triggered again.
Potential savings: $10,000–$30,000 per year depending on use case.

3. Section 831(b): The Mini-Captive Strategy

This is a next-level move: 831(b) allows a business to set up its own insurance company (a "captive") to insure specific, non-traditional risk — and deduct premiums paid into it.

Why it's powerful:
  • Premiums are deductible.
  • The captive's income (up to $2.8M/year in 2025) is tax-free.
Most CPAs avoid it because it's more complex — but complexity is where the real money is saved.
Potential savings: $100,000+ per year for qualifying business owners.

Why Most Advisors Miss These

Because they're trained to be compliant — not strategic. Because these codes aren't on page one of the IRS manual. And because they don't work with a team that specializes in tax offense, not just defense.

If your current advisor hasn't mentioned any of these to you, it doesn't mean they're bad. It just means you've likely outgrown them.

What to Do Now

You don't need to fire your CPA. But you need a strategic team to layer these kinds of tools on top of what they're doing.

My team helps business owners, W-2 earners with K-1 income, and high-income families implement elite tax strategies backed by the IRS code — not financial products.

If you're paying $50K+ a year to the IRS, we can likely help you keep more of it.

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