Elliotts, Inc. v. Commissioner (9th Cir. 1983) organized reasonable compensation analysis into five factor categories courts still use. What each factor requires – and the two details practitioners forget.
The Elliotts Factors in Reasonable Compensation Analysis Read More »
Exacto Spring Corp. v. Commissioner replaced factor lists with one question: would an independent investor accept their return after the executive was paid? How the test works and where it fails.
The Independent Investor Test: Exacto Spring and the Return-Based View of Reasonable Pay Read More »
Watson v. United States (8th Cir. 2012) is the leading case on S corporation compensation set too low. How the court used market data – and what it means for owners and CPAs.
Watson v. United States: The S Corporation Salary Case Every Owner Should Know Read More »
Clary Hood, Inc. v. Commissioner is the modern reference point for reasonable compensation disputes. Four lessons from how the Tax Court treated the experts – comparability, catch-up pay, report ownership, and the hired-gun problem.
Clary Hood and the Anatomy of a Credible Reasonable Compensation Opinion Read More »