Can your business factually support reasonable compensation questions?
We can protect you if the IRS comes at you with questions about reasonable compensation.

What makes compensation reasonable?

People will do nearly anything to save on their tax bills.

Small businesses like single-owner S-corps have to do everything they can to reduce their tax bills in order to stay competitive. That’s why it’s our job to help you keep as much of your money in your pocket as legitimately possible.

But it’s also our job to let you know when one of the practices that once worked to lower your tax bill starts raising red flags at the IRS.

If you’re one of the many single-owner S-corporations who gave yourself a meager salary and took compensation in the form of dividends instead…

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We need to talk.

The IRS has been auditing S-Corporations with a focus on what is called “reasonable compensation” concerns.

In these audits, the IRS asks business owners to prove the compensation they claimed as income in past years was reasonable.

In many cases, these businesses lose the audit because they had no strong basis for the income claimed. The result is all income taken out of the company is reclassified as regular income and taxed accordingly with the associated penalties and interest.


What can you do about it?

First of all, don’t panic. We can help you.

The best solution is to partner with a firm like Books, Taxes & More to have a formal study of compensation.

This study produces a report that answers all the questions the IRS may have concerning the salary of the business owner in the area where the business is headquartered.

It takes into account the business owner’s:

  • education

  • skill level

  • years of experience

  • Plus, the business location and industry norms

We submit the report that we already have prepared and any question of compensation salary versus dividends taken is settled.

Our process has never been disputed.

Want to make sure you’re protected in the event of an IRS audit? Get in touch today for your consultation.

Find out more about BTM’s other services:


"Steve has been a lifesaver for our organization. I would give him 10 stars if I could! Thank you Steve!" ~Le Ann


"I would highly recommend Books, Taxes and More, you will not be disappointed. I've been going to Steve Perry for over 3 years now and I am still amazed at how knowledgeable he is." ~James M


"Knowledgeable and honest! While he is affordable, he is also extremely thorough and the time that he invests in understanding your taxes far outweighs the cost." ~Mattie Phillips

Make your business more profitable today.

Call us at (678) 717-9818 for a consultation.

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