Industry Insights
Articles, eBooks, White Papers, Infographics and more to keep you updated on the world of reasonable compensation.
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How to Stress Test a Reasonable Compensation Figure
Stress testing a reasonable compensation figure is simple. The courts have listed the factors they consider when determining whether a reasonable compensation figure is indeed reasonable. We can use those…
Court Cases & True Stories March 1, 2022
What if an S Corp Owner can’t afford to pay Reasonable Compensation?
This is by far the number one question we receive, and the answer is both simple and complex. Why? Because the amount of Reasonable Compensation actually paid is tied to…
February 1, 2022
W-2 or 1099 for Shareholder-Employees of S Corps?
1099 or W-2? That’s the number one question Jack receives here at RCReports. Answer: W-2 We hear your argument: Paying wages via 1099-MISC instead of W-2 has no tax effect!…
January 1, 2022
How one Reasonable Compensation Report saved a Taxpayer $80,000+
By Paul S. Hamann & Jack Salewski, CPA, CGMA Is credible data really that important? Yes. In one recent case, data convinced an IRS Examiner to abandon an unreasonable position,…
December 1, 2021
77% of Accountants Misinformed on Reasonable Compensation
By Paul S. Hamann & Jack Salewski, CPA, CGMA The most popular methods for computing reasonable compensation are, like the cool kids in high school, cute and fun to hang…
November 1, 2021
“More Action Can Be Taken”: IRS Aims Big Data at Officer Compensation
By Paul S. Hamann & Jack Salewski, CPA, CGMA Just how big of an issue is S Corp. officer compensation under-reporting? Big would be an understatement. The most recent estimate…
October 1, 2021
BLOSSOM DAY CARE v. IRS Tests 20-Year-Old Precedent
By Paul S. Hamann & Jack Salewski, CPA, CGMA “Too clever is dumb” quipped the humorous poet Ogden Nash. He wasn’t wrong. A couple of named Hacker found that out…
September 1, 2021
Fact or Fiction – How are you advising your clients?
By Paul S. Hamann & Jack Salewski, CPA, CGMA We recently polled 993 CPAs, EA’s, and other tax professionals to find out if they could recognize fact from fiction as…
August 1, 2021
Don’t Get Ambushed: The IRS Is Arming and So Should You
By Paul S. Hamann & Jack Salewski, CPA, CGMA For two decades the IRS has been preparing an assault on reasonable compensation for S Corporations. Their arsenal is now fully…
July 1, 2021
How the IRS Determines Reasonable Compensation using the IRS Job Aid
By Paul S. Hamann & Jack Salewski, CPA, CGMA Over the last decade, the IRS has steadily and methodically tackled the compliance hassle that is reasonable compensation. According to an…
June 1, 2021
Reasonable Compensation for all your S Corps in Three EZ Steps
"The only reason for time is so that everything doesn’t happen at once.” Albert Einstein Use the time to your advantage! Here’s how one RCReports subscriber brought every S Corp…
May 1, 2021
Are You Using the Right Approach to determine Reasonable Compensation?
Although there are general guidelines to help you pick the best approach to determine reasonable compensation, there are no hard and fast rules. For the overwhelming majority of your clients,…
April 1, 2021
How should the Directors of an S Corp be paid: 1099 or W-2?
The most common question we receive is if an S Corp owner can pay themselves via 1099 or must it be W-2. (Find the answer HERE) But what is the…
March 1, 2021
Strategies for Reasonable Compensation and Multiple S Corps
There are numerous issues when a business owner is a shareholder in more than one S Corp. Does the shareholder have to complete a reasonable compensation assessment (RCA) for each…
February 1, 2021
Rule of Thumb Used to Calculate Reasonable Compensation Shot Down in Court
By Paul S. Hamann & Jack Salewski, CPA, CGMA Accountants are facts and figures folk. Accountants rely on data and analysis, not myths and tales. Well, not always. In 2020…
January 1, 2021
10 Reasonable Comp Points to Cover with Your Clients this December
By Paul S. Hamann & Jack Salewski, CPA, CGMA Without an accurate Reasonable Compensation figure, tax planning is just a guess. … 10 Reasonable Comp Points to Cover with Your…
December 1, 2020