Reasonable Compensation for S Corps

Overview

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 Corp’s out of the shadows and placed it forefront as a priority issue for CPA’s, EA’s, 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. This event may be a rebroadcast of a live event and the instructor will be available to answer your questions during the event.

Highlights

The major topics that will be covered in this course include:

• Explain the payroll tax advantage of taking distributions over wages
• Review key court cases that shape todays reasonable compensation landscape
• How to use court factors to stress test reasonable compensation
• Best practices for determining reasonable compensation
• Review of the IRS’s enforcement on reasonable compensation; past, present and future

Prerequisites

None

Designed For

CPA & EA practitioners who advise S Corps on the issue of Reasonable Compensation who are interested in learning about current IRS guidelines, and solutions for advising their clients on the issue of Reasonable Compensation.

Objectives

After attending this presentation you will be able to...

• Identify the basic advantages of Distributions V. Salary/Wages
• Assess the consequences of an IRS re-characterization of distributions
• Review Reasonable Compensation in the courts
• Select the IRS guidelines for determining Reasonable Compensation
• Determine when Reasonable Compensation applies to your client
• Illustrate advanced scenarios
• Examine Tips from the pros and IRS Red Flags
• Study why Reasonable Compensation has become a priority for the SB/SE division of the IRS
• Identify options for determining Reasonable Compensation

Preparation

None

Notice

This course is provided by a third-party vendor. Please note that login instructions will not be available in the ‘My Upcoming CPE’ section of the NESCPA website. Instead, the login instructions will be sent directly to you via email by CPA Crossings. Upon completing the course, your hours will be recorded in the ‘My CPE Tracker’ section of the NESCPA website.