Between 2010 and 2020 a parade of Court Cases, IRS Factsheets, Job Aids and Internal Memos, plus Heightened IRS scrutiny and Preparer Penalties has brought the issue of “Reasonable Compensation for S Corps” out of the shadows and placed it forefront as a priority issue for CPAs, EAs, and Tax and Financial advisors to cover with their clients. Now as 2024 closes we have already started to see the upswing in S Corp audits with Reasonable Comp as a major audit item. We will explore key court cases, IRS guidelines, preparer penalties and some of the obscure tools the IRS has put in place. We debunk common myths and fiction on how reasonable compensation should be calculated and replace it with facts and methodologies that the IRS relies on, so that you can defend that number on the tax return you file on behalf of your client.