Shareholder-Employee Compensation Advisory Services
Shareholder-Employee Compensation
Why is Shareholder-Employee Compensation such a high priority for the IRS or hot button issue for business owners?
The Internal Revenue Service may determine that adjustments should be made to the income and expenses of tax returns for both the corporation and an individual shareholder if the officer is substantially underpaid or overpaid for services provided to their company.
Business owners of C-Corporations on the other hand often contend that high compensation is justified by the employee’s contribution to the company’s success or to make up for years of lower compensation when the business was struggling.
Business owners of S-Corporations on the other hand often contend that they are taking significant salary and prefer to take distributions which are not subject to payroll taxes. For these reasons both the IRS and Shareholder-Employees are always at odds.
We can provide you peace of mind. Our Shareholder-Employee Compensation Advisory Services are designed to establish what is reasonable and to help the shareholder-employees document their compensation in the event of an IRS challenge. You can contact me if you are concerned about an IRS challenge, would like to plan ahead and would like to stress-test your compensation. Call me today for assistance in this area.