CORE CAPABILITIES

Six domains.
One authoritative engine.

ClearTax AI combines CPA-level depth with real-time reasoning across every area that matters to modern founders and enterprises.

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01

Corporate Structure & Entity Selection

LLC vs. S-Corp vs. C-Corp analysis, salary-vs-distribution optimization, and QBI deduction strategies. Real numbers, real elections.

IRC §199A · §1361 · §11
02

Crypto & Digital Asset Taxation

Staking income, DeFi yield, NFT sales, hard forks, airdrops — capital vs. ordinary income analysis with defensible basis tracking methods.

IRS Notice 2014-21 · Rev. Rul. 2019-24
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03

Cross-Border U.S.–Canada

Ontario/NY entity structures, FBAR compliance, Form T1135, W-8BEN-E, Closer Connection exceptions, and treaty benefit elections.

IRC §7701 · Canada–U.S. Treaty Art. IV
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04

AI & Automation Income Streams

Royalty vs. service income classification for AI-generated revenue, passive activity rules, and software IP structuring under domestic and Canadian regimes.

IRC §469 · §861 · ITA §13
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05

Audit Defense & Documentation

Contemporaneous documentation strategy, IRS audit risk scoring, penalty abatement arguments, and Form 8886 reportable transaction analysis.

IRC §6662 · Treas. Reg. §1.6664-4
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06

High-Income Founder Planning

QSBS exclusion eligibility, §1202 planning, deferred compensation, carried interest, and exit strategy tax minimization at Section 1045 rollover.

IRC §1202 · §83(b) · §409A
LIVE DEMO · STRUCTURED OUTPUT

The AI that thinks like
a Big Four partner

Every response follows a rigorous structure: Summary → Analysis → Legal Basis → Risk Level → Optimization. No guessing. No generics.

USER QUERY
"How do I minimize taxes on my SaaS business generating $500K/year? I'm currently an LLC filing as sole proprietor in New York."
CLEARTAX AI™ ANALYSIS
SUMMARY
At $500K net, your current structure leaves $35–55K/yr on the table. An S-Corp election + reasonable salary strategy eliminates self-employment tax on distributions and unlocks the 20% QBI deduction.
LEGAL BASIS
IRC §1361 — S-Corp election via Form 2553  |  IRC §199A — QBI deduction up to 20% for qualified trades  |  IRC §3101 — SE tax avoided on distributions above reasonable salary
RISK LEVELLOW
Well-established position. IRS scrutiny focuses on unreasonably low salaries. Reasonable salary of $120–150K is defensible for a SaaS founder in NY.
OPTIMIZATION
✓ S-Corp Election ✓ Solo 401(k) $66K ✓ Augusta Rule §280A ✓ QSEHRA Health Plan
USER QUERY
"I earned $80K from Ethereum staking rewards in 2025. Do I pay ordinary income or capital gains? When is it taxable — when received or when sold?"
CLEARTAX AI™ ANALYSIS
SUMMARY
Staking rewards are ordinary income at time of receipt under Rev. Rul. 2023-14. Your $80K is taxable in 2025 at ordinary rates. Subsequent sale triggers a second tax event (capital gain/loss).
LEGAL BASIS
Rev. Rul. 2023-14 — IRS confirmed staking rewards = gross income when received  |  IRC §61 — Broad income definition  |  IRC §1001 — Sale of rewards triggers second gain/loss event based on FMV at receipt as cost basis
RISK LEVELMODERATE
Jarrett v. U.S. (M.D. Tenn. 2022) challenged this — court ruled for taxpayer on unique facts, but IRS rejected the reasoning. New stakers should follow Rev. Rul. 2023-14. Jarrett position is high-risk for audit.
OPTIMIZATION
✓ HIFO Lot Selection ✓ Tax-Loss Harvesting ✓ Qualified Opportunity Zone
USER QUERY
"I'm a Canadian citizen (Burlington, Ontario) moving to New York for 6 months per year to run my startup. What are my tax residency obligations in both countries?"
CLEARTAX AI™ ANALYSIS
SUMMARY
You will likely be a dual tax resident — Canada under the ITA's factual residency test, and potentially U.S. under the Substantial Presence Test. Treaty tiebreaker provisions (Art. IV) will be critical to avoid double taxation.
LEGAL BASIS
IRC §7701(b) — U.S. SPT: 183+ days in 3-year rolling formula  |  ITA §250(3) — Canadian factual residency (ties to Ontario)  |  Canada–U.S. Treaty Art. IV(2) — Tiebreaker: permanent home → habitual abode → nationality
RISK LEVELHIGH
Dual-filing without Treaty election = double taxation on global income. You must file Form 8840 (Closer Connection) or Form 8833 (Treaty position) with the IRS. CRA departure return may trigger deemed disposition of assets.
OPTIMIZATION
✓ Form 8840 Filing ✓ T1161 Asset Reporting ✓ FBAR Compliance ✓ Treaty Art. IV Tiebreaker
USER QUERY
"I'm planning to sell my C-Corp startup shares after 5 years. I invested $500K at founding. Can I exclude the gain under QSBS? What's the maximum exclusion?"
CLEARTAX AI™ ANALYSIS
SUMMARY
If your shares qualify, you can exclude up to $10M (or 10× your basis — whichever is greater) from federal capital gains. Your $500K basis gives a $5M exclusion floor, but the $10M cap will likely apply. Zero federal tax on qualifying gain.
LEGAL BASIS
IRC §1202 — 100% exclusion for QSBS held >5 years, acquired after Sept. 27, 2010  |  Qualification: domestic C-Corp, active business, assets <$50M at issuance  |  IRC §1045 — Rollover if held <5 years into new QSBS
RISK LEVELLOW
Well-established provision. Risk concentrates in qualification requirements: watch for service business exclusion (health, law, finance) and the $50M aggregate gross asset test at time of issuance. Early §83(b) election is critical.
OPTIMIZATION
✓ Stack Multiple Holders ✓ §83(b) Election Day-1 ✓ §1045 Rollover Backup ✓ State Tax Planning (CA excl.)
HOW IT WORKS

From question to
audit-ready answer

01

Submit Your Scenario

Describe your entity structure, jurisdiction, income type, and specific tax question in plain language.

02

IRC & Treaty Analysis

ClearTax AI cross-references IRC sections, Treasury Regulations, CRA guidance, and treaty provisions simultaneously.

03

Structured Output

Receive a structured response: Summary, Detailed Analysis, Legal Basis, Risk Level (Low/Moderate/High), and Optimization opportunities.

04

Audit-Ready Documentation

Every analysis cites the exact code sections, reg paragraphs, and IRS guidance needed to defend a filing position under examination.

CROSS-BORDER EXPERTISE

Built for the
Ontario–New York corridor

ClearGlass operates at the intersection of Canadian and U.S. tax law — the most complex bilateral tax relationship in the world, with $900B+ in annual cross-border trade.

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U.S. Federal & New York

From IRC §482 transfer pricing to New York's separate-entity unitary filing, ClearTax AI handles federal + state + NYC combined reporting.

SALT deduction cap strategies (IRC §164)
NY pass-through entity tax (PTET) election
NYC UBT for unincorporated entities
GILTI, FDII, and BEAT for multinationals
FBAR (FinCEN 114) + Form 8938 dual compliance
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Canada · CRA · Ontario

From SR&ED credits to Ontario's small business deduction, ClearTax AI covers the full ITA alongside CRA interpretation bulletins.

SR&ED tax credit optimization (ITA §127)
Lifetime Capital Gains Exemption (LCGE)
Ontario Small Business Deduction (SBD)
Corporate Attribution rules (ITA §74.4)
T1135 Foreign Income Verification reporting

The Canada–U.S. Tax Treaty: your most powerful tool

ClearTax AI interprets all 30 articles of the Fifth Protocol Canada–U.S. Convention to minimize withholding, eliminate double taxation, and structure cross-border entities correctly from day one.

ARTICLE IV

Dual-residency tiebreaker rules — permanent home, habitual abode, centre of vital interests

ARTICLE VII

Business profits attribution — permanent establishment thresholds and nexus analysis

ARTICLE XI

Withholding on interest — reduced to 0% between related parties under Fifth Protocol

ARTICLE XIII

Capital gains — exclusion for gains on shares of companies whose value derives from Canadian real property

ARTICLE XVIII

Pensions — cross-border RRSP/IRA recognition, TFSA treatment, and §402 rollover eligibility

ARTICLE XXVI-A

Mutual collection assistance — IRS and CRA share collection authority for cross-border liabilities

DOMAIN SPECIALIZATIONS

Every angle.
Every jurisdiction.

ClearTax AI covers the full spectrum of modern tax complexity — from DeFi protocols to international holding structures.

Crypto & DeFi

Staking, yield farming, NFT drops, wrapped tokens, DAO distributions, and FIFO/HIFO/Spec ID lot selection strategies.

Rev. Rul. 2023-14Notice 2014-21Form 8949
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AI & Automation Income

IP royalty structuring, software licensing vs. service treatment, automated business passive activity classifications.

IRC §861IRC §469OECD Pillar Two
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Entity Structuring

Delaware C-Corp, Ontario Corporation, LLC, ULC, holding company layering, and check-the-box election strategy.

IRC §7701ITA §89Form 8832
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International Tax

GILTI, Subpart F, CFC rules, transfer pricing, BEAT, FDII, and OECD BEPS compliance for global operations.

IRC §951AIRC §482TCJA §14102
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Founder & VC Tax

QSBS §1202 planning, §83(b) elections, carried interest, waterfall modeling, and secondary transaction structuring.

IRC §1202IRC §83(b)IRC §1231
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Audit & Controversy

IRS correspondence audit responses, substantial authority analysis, reasonable cause penalty defenses, and Appeals strategy.

IRC §6662IRC §7491Rev. Proc. 2023-15
STRUCTURED OUTPUT FORMAT

Every answer is
IRS-ready

ClearTax AI never responds with generic advice. Each analysis follows a six-section format designed to withstand IRS examination.

CLEARTAX AI™ · STRUCTURED RESPONSE FORMAT
01 · SUMMARY
Plain-English conclusion with the definitive answer and key numbers up front — no preamble, no disclaimers, no hedging.
02 · DETAILED ANALYSIS
Step-by-step reasoning through the tax mechanics: income classification, timing rules, basis calculations, and election availability.
03 · LEGAL BASIS
Exact citations: IRC §199A, Treas. Reg. §1.199A-1, Rev. Rul. 2023-14, relevant case law, and treaty articles — everything a tax attorney needs to draft a memorandum.
04 · RISK LEVEL
LOW · MODERATE · HIGH Calibrated audit risk with explanation of IRS scrutiny patterns and controversy history.
05 · OPTIMIZATION OPPORTUNITIES
✓ Election Strategy ✓ Timing Optimization ✓ Entity Restructuring ✓ Treaty Benefit
06 · FOLLOW-UP QUESTIONS
Targeted clarifying questions that unlock a more precise analysis — state residency, entity age, asset basis, prior elections made.
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Important: AI Guidance — Not a Substitute for Licensed Counsel

ClearTax AI provides legally-grounded analysis for educational and planning purposes. It is not a substitute for advice from a licensed CPA, tax attorney, or enrolled agent. Tax law changes frequently — always verify current code sections and consult a qualified professional before filing or taking a tax position. ClearGlass Inc. does not establish an attorney-client or CPA-client relationship through ClearTax AI outputs.

Stop overpaying.
Start with clarity.

ClearTax AI is now in private beta for ClearGlass clients, Ontario–NY founders, and enterprise tax teams. Request early access or reach out to discuss your specific cross-border situation.