• Jim Payne

S Corp Owner Compensation

S Corp Owners do have to be concerned about the IRS and it’s plans to push the Reasonable Compensation issue. Recently, the IRS issued a memorandum to its agents about keeping challenges from going to Tax Court. Why is this important?

  1. Tax must be paid now. When filing a petition with the Tax Court, taxpayer can avoid paying the tax until the matter is finally resolved.

  2. Leverage Lost. Filing or even the threat of filing a petition with the Tax Court can give taxpayers and their advocates’ leverage to get the appeals agent to settle the dispute favorably.

Read more about it from Paul Hamann at RC Reports. https://rcreports.com/blog/no-tax-court-for-reasonable-compensation-re-characterization/


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