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Reasonable Compensation for S Corps


Cost Free
Presentation Length 2.0 hours

Recorded DateJune 11, 2024
CPE:Not available
(archived webinars do not offer CPE credits)
Subject AreaTaxes
Course LevelBasic
Course Description

Between 2010 and 2020 a parade of Court Cases, IRS Factsheets, Job Aids and Internal Memos, plus Heightened IRS scrutiny and Preparer Penalties has brought the issue of ‘Reasonable Compensation for S Corps' out of the shadows and placed it on the forefront as a priority issue for CPAs, EAs, Tax and Financial advisors to cover with their clients. We will explore key court cases, IRS guidelines, preparer penalties and some of the obscure tools the IRS has put in place. We debunk common myths and fiction on how reasonable compensation should be calculated and replace it with facts and methodologies that the IRS relies on.


Learning Objectives:

  • Determine the basic advantages of distributions v. salary/wages

  • Assess the consequences of an IRS re-characterization of distributions

  • Review reasonable compensation in the courts

  • Discuss the IRS guidelines for determining reasonable compensation

  • Determine when reasonable compensation applies to your client

  • Explain advanced scenarios

  • Review tips from the pros and IRS red flags

  • Review why reasonable compensation has become a priority for the SB/SE division of the IRS

  • Identify options for determining reasonable compensation

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Paul Hamann is an expert on determining Reasonable Compensation for closely-held business owners.  He has educated more than 100,000 tax advisors and valuators on the topic of Reasonable Compensation and has been published in numerous national and state journals.

Paul founded RCReports in 2010.  RCReports cloud software determines reasonable compensation for Closely-Held Business Owners and is used by CPA’s, EA’s, Tax Advisors, Valuators, Forensic Accountants and Attorneys when they need to determine a Reasonable Compensation figure for a client.

When Paul isn’t in the office, he enjoys spending time with his wife and chocolate lab, hiking Colorado’s back country or paddling its scenic lakes and rivers.


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About Our Presenter

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RCReports is a tool for Tax and Financial advisors to determine Reasonable Compensation for a client. RCReports provides a defensible position to an IRS challenge (for S-Corps), and is an excellent planning and valuation tool. RCReports synthesizes a proprietary blend of IRS criteria, Court Rulings, geographic data and our EXCLUSIVE database of wages to accurately assess Reasonable Compensation for S Corp, Small & Closely Held Business Owners.