Focus on S corps and shareholder compensation

The Treasury Inspector General for Tax Administration (TIGTA) recently summarized its findings concerning efforts by the IRS to identify S corporation reasonable compensation issues. The report concludes that the IRS is likely failing to adequately identify S corporations that are underreporting their shareholders’ compensation in an effort to avoid employment taxes. Interestingly, in its response, the IRS largely disagreed with the inspector general’s conclusions and its related recommendations. READ MORE