Mastering the Rules of S Corporation Shareholder-Employee Compensation

Reporting Health Insurance Payments, ACA Requirements, and Meeting the Reasonable Compensation Standard

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, February 1, 2017
Recorded event now available


This webinar will provide tax advisers and professionals with a comprehensive and practical examination of the rules governing compensation of S corporation officers and shareholders, focusing on how to document and support reasonable compensation, and on how to handle company-provided health insurance as a compensation issue.

Description

Perhaps the most significant advantage of the S corporation is the ability of shareholders to pass through some of the corporation’s net income to its shareholders without incurring employment tax on the amounts. The IRC requires that S corporations pay “reasonable compensation” to shareholders with active participation in the business. However, the Code does not set a bright-line rule, but instead uses a facts and circumstances test to determine what is reasonable compensation.

The IRS is aggressively pursuing S corporation shareholder-employee compensation arrangements in circumstances where the Service deems the shareholder is avoiding employment tax through unreasonably low compensation. The Service’s track record in tax court has been, by and large, successful. Generally, when the IRS challenges a compensation scheme, distribution payments are reclassified as salary, resulting in S corp shareholder-employees paying employment tax plus penalties.

Another challenge to maintaining S corporation officer compensation plans as compliant is the treatment of health insurance payments and reimbursements. The ACA’s prohibition against reimbursements creates another wrinkle in that analysis. Failure to properly structure and report health insurance payments on behalf of shareholder-employees could void the deduction to the business, resulting in additional tax to the shareholder.

Listen as our experienced panel provides comprehensive guidance on how to document an S corporation shareholder-employee compensation plan within IRS guidelines, how to remedy plans that could be subject to examination, how to defend against IRS challenge, and how to handle health insurance coverage for S corporation shareholder-employees.

Outline

  1. Requirement and standards for reasonable compensation
  2. Incentive compensation
  3. Medical insurance for shareholders
  4. Equity compensation
  5. Case study

Benefits

The panel will review these and other important issues:

  • What types of businesses and compensation arrangements are most likely to attract IRS challenge?
  • Standards for structuring and defending compensation plans that are reasonable
  • Health insurance payments as compensation and meeting ACA coverage mandates

Learning Objectives

After completing this course, you will be able to:

  • Identify the types of businesses and compensation arrangements that are subject to IRS challenges
  • Discern reasonable standards for structuring and defending S corp employee compensation plans
  • Determine proper treatment of health insurance payments to meet ACA coverage mandates

Faculty

Samuel D. Brotman, Atty
Brotman Law, San Diego

Mr. Brotman's practice primarily centers on all aspects of tax litigation and tax controversies, and he frequently handles corporate and litigation matters related to businesses.Prior to founding his firm, he chaired the corporate law and corporate tax departments for a prominent boutique tax firm. He has an extensive corporate law background and served as lead counsel on several major transactions, navigated his clients through several multi-million dollar commercial debt workouts, and oversaw day-to-day legal operations for two large Southern California corporations.

Jason Watson, EA, MBA, Managing Partner
Watson CPA Group, Colorado Springs, Colo.

Mr. Watson advises small business owners in creating a map for the future. His focus is on S corporations, self-employment taxes, health insurance issues and retirement planning. He is a published author on tax issues for S corporations and LLCs, Taxpayer’s Comprehensive Guide to LLCs and S Corps.


EA Credit

Enrolled Agent credit processing is available for an additional fee per person.

EA Processing $5.00


Recordings

CPE On-Demand

Includes video streaming of full program plus handouts (available within a week of the live webinar).

Strafford is a NASBA-approved CPE provider for On-Demand webinars.

This program is eligible for 2.0 CPE credits.

  • Field of Study: Taxes.
  • Level of Knowledge: Intermediate.
  • Advance Preparation: Printing and reviewing Program Outlines and materials.
  • Teaching Method: Seminar/Lecture.
  • Delivery Method: QAS Self-Study.
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules for S Corporations; supervisory authority over other preparers/accountants. Specific knowledge and understanding of IRC standards on "reasonable compensation for actively participating shareholders; familiarity with the Affordable Care Act provisions regarding reporting of health insurance payments on behalf of shareholder-employees.

On-Demand Webinar & CPE Processing $182.00


Recorded Event

Includes full event recording plus handouts.

Note: Self-study CPE and EA credits are not offered on recorded events.

Recorded Webinar Download $147.00

How does this work?

Recorded Audio Download (MP3) $147.00

How does this work?

DVD (Slide Presentation with Audio) $147.00 plus $9.45 S&H

How does this work?


NASBA CPE Sponsor

National Registry of CPE Sponsors

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Program Materials

Requires Adobe Reader 8 or later. Download Acrobat FREE.

Program Materials

Requires Adobe Reader 8 or later. Download Acrobat FREE.

or call 1-800-926-7926

CPE Credit

Strafford is a NASBA CPE sponsor and our live webinars qualify for CPE credits. They offer you a high quality, cost effective, and convenient CPE option, with no lost travel time or expenses.

or call 1-800-926-7926

EA Credit

Strafford is an IRS approved continuing education provider and this course is approved for 2 enrolled agent (EA) credit hours.

or call 1-800-926-7926

Customer Reviews

I liked the concentration on specific issues and examples.

Edita Rimalovsky

Komisar Brady & Co.

I loved the tools and handouts. Every CPE class should offer these kind of tools.

Jackie Meyer

Sample and Bailey

The conference was technical, informative and presented at a good pace.

Krystal Ching

KMH

I liked the fact that there was more than one person presenting the material. It's nice to hear multiple perspectives.

Matt Bristow

Cover & Rossiter

Excellent seminar! It was efficient and the important topics were covered at just the right pace; no time was wasted covering information that the participants already knew.

Rhonda G. Williams, CPA

Barraclough & Associates

or call 1-800-926-7926

Our Guarantee

Strafford webinars are backed by our 100% Unconditional Money-Back Guarantee: if you are not satisfied with any of our products, simply let us know and get a full refund. For more information regarding complaints and refunds, please contact us at 1-800-926-7926 ext 10. Complaints regarding this program can be submitted via the course evaluation found in the “Thank you” e-mail at the end of the course.