Content Provider
Sponsored by
Logo rcreports
Handout Materials
Presentation Slides
Additional Materials
Case Study
Webinar Technical FAQs
Free cpece webinars
Defending Reasonable Compensation in Litigation and Examination


This 2-hour course qualifies for 1 CPE/CE in Taxes and 1 CPE in Business Law.
Cost Free
Presentation Length 1.0 hour

Recorded DateFebruary 21, 2024
CPE:Not available
(archived webinars do not offer CPE credits)
Subject AreaTaxes
Course LevelBasic
Course Description

The IRS is increasing enforcement action with respect to shareholder compensation at S Corps. And challenges to compensation amounts have become more common in shareholder litigation, business valuations, family court, discrimination cases, and other types of disputes.

This session will explore how to determine a defensible compensation amount for litigation or tax authority examination, and how to know when amounts are unreasonably high or low. We will explain the commonly accepted approaches and evaluate data sets that are used as compensation comparability data.

Defending reasonable compensation for closely held SMBs can be a lucrative specialty niche for practitioners growing their advisory service offerings. For advisors already engaged in valuation and tax resolution, knowing how to defend your reasonable compensation recommendation can keep you from getting blindsided on the witness stand and arm you with expert knowledge that will help you determine the credibility of the opposing side’s compensation figure, and how to discredit it when appropriate.

Learning Objectives:

  • Review the cost, market, and income approaches for determining reasonable compensation

  • Evaluate compensation surveys and data sets for credibility

  • Identify how to use software to extract appropriate pay amounts from benchmarking data

  • Determine how professional judgment and defensible assumptions can support an opinion

  • List steps involved in preparing to defend your position in court or an IRS examination

  • Give examples of actual case studies and tips from an experienced expert witness

Not logged

As a compensation consultant, Stephen Kirkland, CPA, CMC, CFF works with closely-held businesses and their advisers, including valuators and financial analysts.

He has been determining reasonable/replacement compensation amounts for business owners since 1995. This includes preparing analyses and opinion letters to help valuators normalize owner compensation. His experience also includes providing courtroom testimony in five U.S. Tax Court cases to opine on owner compensation amounts.

Mr. Kirkland has assisted hundreds of valuators, attorneys, and other advisors across the country and has been engaged by the IRS and by the U.S. Department of Justice/Tax Division as an expert witness in litigation over business-owner compensation.

About Our Sponsor

Logo rcreports
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.