why s corp owners need a custom job profile

Why S Corp Owners Need a Custom Job Profile

A small business owner I know jokes that his business card should read “President and Janitor” (and everything in between).  So, when my friend tries to determine his reasonable compensation figure (at his accountant’s request), should he be compensated as President?  Janitor?  Or somewhere in between?  Where in between?

why there is no right answer for reasonable compensation but there are wrong ones

Why there is no right answer for Reasonable Compensation – but there are wrong ones

The wrong answer goes something like this:  I guessed; I split my distribution 50/50, or any other answer that involves a WAG.  In other words, any answer that does not have supporting information will probably have little creditability with the IRS.  So if there are wrong answers how come there aren’t right answers?  The easiest way to …

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reasonable compensation then vs now

Reasonable Compensation Then & Now

It doesn’t seem that long ago that the best advice for determining reasonable compensation was a rule of thumb or safe harbor figure; boy, have things changed.  Beginning in 2005 the IRS launched a study of S Corp compliance.  Since launching this study the IRS has:


Don’t Take My Word For It…

Mid-summer is a good time to take a break and share what others are saying about Reasonable Compensation.  This month I have assembled some of the most recent and poignant reports on Reasonable Compensation for Shareholder-Employees of S Corps from some big-name publications, your peers, and our government – Enjoy…

what about bob sm

What about Bob?

In the 1991 movie What about Bob, Bob Wiley (played by Bill Murray) asks Dr. Leo Marvin (played by Richard Dreyfuss) how best to conquer his phobias.  Dreyfuss deadpans, “Baby steps.” I often think about this movie when I am asked by CPA’s and financial advisors about the best way to get their clients to comply with …

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rcreports shines in irs audit

RCReports Shines in IRS Audit!

In January RCReports were used effectively in an IRS audit appeal.  The CPA, armed with knowledge from our webinar, and a Reasonable Compensation Report generated by RCReports, was successful in lowering his client’s Reasonable Compensation figure from $100,000 to $60,000 – saving their client employment taxes, interest, and penalties on $40,000!

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