AIco, a private company (not a public company), made a two-year employment contract to attract Yoshi as its Chief Compliance Officer. Each year under the contract, Aico will pay Yoshi $200,000 cash and 500 Crypto R units (a cryptocurrency). In July 2017, at the time of the signing, each unit of Crypto R was worth $100. AIco had acquired 1,000 Crypto R units in 2017 at $100. In 2018, during the first year of the contract, each unit of Crypto-R increased to an average of $200. Thus, in 2018 Aico deducted $400,000 of compensation for Yoshi. In 2019 (the second year of the contract), each unit of Crypto R soared to $8,000. Thus, in 2019, Yco's deducted $4,200,000 in compensation for Yoshi. The IRS reduced AIco's deduction in both 2018 and 2019 to $250,000 per year, disallowing any compensation above that amount. The IRS believed that each year Aico had effectively sold 500 shares of Crypto R.

AIco had self-reported tax liabilities on its 2019 returns but did not pay them. The IRS was attempting to collect about $270,000 when it sent Yoshi a Collection Due Process (CDP) notice in April 2020. AIco timely requested a CDP hearing, but blew off attending the hearing. However, AIco was given a second chance in the form of an additional two weeks after the scheduled hearing. AIcosaid it did not believe it was proper to collect any taxes until the Covid-19 Pandemic was over, whenAIco was located in a federally declared disaster area.

Write three sophisticated tax issues for client,the most important issue from each paragraph of the problem.Each issue must include relevant critical facts and precisely where in the code each issue arises.