"RCReports has helped us in doing TCJA planning for our clients. We have been doing Compensation studies to support wages in order to maximize the 199A deduction. Interestingly enough, a by product of having staff assist with the studies is that they have done studies on themselves to assist in their salary negotiations. I wonder if I can charge them for their studies.Chris York, CPA, RCReports Subscriber since August 2017
"When I was first introduced to RCReports.com, I had an S-Corp client going through an IRS audit. One of the main issues being challenged was the shareholder-employee compensation. My client had only recorded $24,000 in W-2 wages for the years 2009, 2010 and 2011 yet had taken out substantially more from the S-Corp in the form of shareholder dividends. The IRS was suggesting that the shareholder wages for those years should be around $100,000 based on their research using certain internet salary research tools.
I used RCReports.com to prepare a Reasonable Compensation Report that we shared with the IRS agent. The report did not support a salary of $24,000 but it did suggest an amount substantially lower than the $100,000 that the IRS was proposing. After studying the report the IRS agreed to reduce my client’s annual salary to $60,000 for the years in question and indicated that they were very appreciative to see that we had done some research and were able to provide a report that they (the IRS) could rely upon.
I now highly recommend that my clients prepare a Reasonable Compensation Report through RCReports.com in advance of setting up their salary in their S-Corp so that if ever (or when) challenged by the IRS they already have in hand a basis for the amount. I predict the IRS will be less likely to suggest an inflated compensation amount and you will be spared the time and headache needed to refute an arbitrary calculation. Tom Schadegg, CPA, Edmond, Oklahoma, Feb 2013
"I like the salary calculation because some of my clients don’t understand why they need to pay themselves “x” dollars. They want to keep it in the bank account or hire more people and pay them instead. It’s a very user-friendly software and I don’t have any issues finding prior reports, users, etc." Regina G., RCReports Subscriber since August 2017
"I only have a few business clients but they generate revenue of $10M - $20M annually and I find that all I can do to protect them tax wise is extremely valuable. This reasonable compensation calculation has already assisted each of them. They place a lot of trust in me and expect me to come up with ways to keep them clean. This is one tool I use to do that." Ron E., RCReports Subscriber since July 2017
"Being able to generate a reasonable comp report is what it is all about from our standpoint and it will be especially important over the next couple months as we are combining this process with our tax planning engagements around the new Tax Cuts." Greg M,
"I thought I would let you know that I used your Reasonable Compensation Reports for two years under audit and was successful in reducing that client’s liability by $20,000. Your reports had a big part in helping to convince the auditor to lower her first assessment against my client." Carl Hanton, EA, Bradenton, Florida
"My firm works almost exclusively with service-based businesses and their owners. Our clients rely on us for anything related to tax planning. We try very hard to perform our tax planning consistently with each client. Most client issues are common from client to client, so once we agree as a firm on the best way to handle a particular tax issue, we all handle that issue consistently going forward.
One of our biggest pain points until recently was determining reasonable compensation for S-corporation owners. Many times potential clients would challenge us on our methodology for solving that particular issue and compare our answer with what other CPAs had told them. It was difficult to give a consistent answer since our approach tended to be ad-hoc.
Attending the reasonable compensation seminar by RC Reports was an eye-opening experience. We learned about recent tax court activity and the new ways the IRS is looking at this important issue. We immediately started using the RC Reports tool with our S-corporation shareholders.
The response with our clients has been very positive. Not only does this tool take pressure off of us to prognosticate everyone’s individual circumstances, it also helps clients realize the value and expertise we are providing them as we help them adjust and interpret the report, and then update their tax planning accordingly. We’ve made the RC Reports tool a permanent part of our tax planning process. We now have a consistent and defensible way of advising our clients on this important tax issue." Luke K Gheen, MBA, CPA, Gheen & Co., CPA. LLA
"I subscribed because I need my clients to have a reliable comp report for S-Corp and I saw your presentation about a year ago and was not ready to sign up as I did not have my practice yet. You also come highly recommended from accounting/tax groups and I am part of." Boris Musheyev, CPA