#1 Reasonable Compensation Analysis Solution. Start Now

RCReports determines Reasonable Compensation
for Closely-held business owners

Used by CPA's, EA's, Tax Advisors, Valuators, Forensic Accountants and Attorneys when they need to determine a Reasonable Compensation figure for a client.
Whether for Tax Compliance, Normalization or Planning, RCReports has a report to fit your need.
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Popular Insights
The Cost Of Doing Nothing
  • Undervaluing Owner Wages
    The Eighth Circuit affirmed the district court’s decision in Watson, holding that an S corporation shareholder-employee (Watson) who paid himself $24,000 in salary during 2002 and 2003 while withdrawing over $375,000 in distributions was not reasonably compensated for his services.
    in payroll taxes, penalties, and interest
    dividends reclassified by order of court
  • Too Little, Too Late
    Dahl, an accountant and sole shareholder, paid himself a small salary. The IRS hired a valuation expert to determine what other accountants were paid for similar services. What really sent this case over the edge is that Dahl paid himself less than his staff including clerks.
    refund claimed by Dahl was declined
    in payroll taxes, penalties, and interest
  • Real Estate Agent Loses Reasonable Compensation Case
    McAlary set his compensation at $24,000 per year, though that was never paid. In 2006, the S corporation reported net income of $231,454, but paid no compensation to McAlary. Instead, McAlary took a distribution of $240,000. IRS hired a valuation expert to determine that a real estate agent should have been paid $100,755 salary out of his S Corp’s net income of $231,454.
    was reclassified as compensation.
    in payroll tax, interest, and penalties
Reasonable Compensation Solutions
All reports deliver an independent and unbiased Reasonable Compensation figure that can be relied on in IRS examinations and litigation.
RCReports Shines in IRS Audit!
RCReports was used effectively in an IRS audit appeal
CPA, armed with knowledge from our...
$5,000 Preparer Penalty
A CPA sought us out to run Reasonable Compensation
Reports after he was hit with a $5,000 preparer penalty...
Modern Accounting & RCReports
One of the hard and fast rules of working with
SMB’s is that you will regularly advise them ...
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Why Reasonable Compensation
Build a closer relationship with your client, enhancing your
ability to become the person your clients turn to first...
Are You at Risk?
Most S Corp owners do not understand Reasonable Compensation,
as their tax advisor, the burden of educating them falls on you...
Why there is no right answer
The wrong answer goes something like this: I guessed; I split my
distribution 50/50, or any other answer that involves a WAG...
The Cost Approach breaks the duties of the business owner into its components such as company administration, accounting, finance, marketing, advertising, engineering, purchasing, etc.
Compares the business owner's compensation to compensation within the same industry.
Seeks to determine whether a hypothetical investor would be satisfied with their return on investment when looking at the financial performance of the business in conjunction with the compensation level of the owner.
What The Experts Say
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