IRS Scrutiny of Reasonable Compensation Usually Deals with Excess Compensation

question 87

True/False

IRS scrutiny of reasonable compensation usually deals with excess compensation paid to the shareholders of closely held corporations and unreasonably low salaries to shareholders of an S corporation.

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Definitions:

Assignee

An individual or entity to whom rights or interests have been transferred by another, especially in contractual or legal contexts.

Obligor's Performance

The execution of duties or fulfillment of obligations by the party (obligor) that is bound by a contractual agreement to provide a service, payment, or benefit to another party.

Life Insurance

A contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries upon the death of the insured.

Proceeds

The amount of money or assets received from a transaction, sale, or event.