BarbriSFCourseDetails
  • videocam Live Webinar with Live Q&A
  • calendar_month February 27, 2026 @ 1:00 p.m. ET./10:00 a.m. PT
  • signal_cellular_alt Intermediate
  • card_travel Tax Preparer
  • schedule 110 minutes

S Corporation Shareholder-Employee Compensation: Reasonable Compensation Standards

$197.00

This course is $0 with these passes:

CPE
ALL
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About the Course

Introduction

This course will provide tax advisers and other professionals with a comprehensive examination of the rules governing compensation of S corporation officers and shareholders, focusing on determining, documenting, and supporting reasonable compensation to avoid or withstand IRS scrutiny.

Description

S corporation owner compensation is one of the most dangerous compliance minefields facing accountants and their clients today. Improperly setting or documenting reasonable compensation can trigger IRS audits, costly reclassification of distributions as wages, back taxes, steep penalties, and even the loss of S corporation status—resulting in double taxation and personal liability.

This session will expose the most common pitfalls and audit red flags, including low or arbitrary salaries, lack of documentation, and reliance on industry myths. Attendees will learn how to identify and avoid these dangers, understand the IRS’s enforcement priorities, and implement best practices for determining and defending reasonable compensation. Whether you’re new to S corporations or seeking to sharpen your compliance skills, this presentation will equip you to protect your clients—and your practice—from the very real risks of getting S corporation compensation wrong.

Listen as our experienced panelist provides guidance on documenting an S corporation's shareholder-employee compensation plan, plans that could be subject to examination, and defenses against IRS challenges.

Presented By

Paul S. Hamann
President
RCReports, Inc

Mr. Hamann is an expert on determining reasonable compensation for closely-held business owners. He has educated more than 30,000 tax advisors on the topic of reasonable compensation for shareholder-employees of S Corps and has been published in numerous state CPA society journals. He, along with other experts in their own fields founded RCReports in 2010. RCReports cloud software determines reasonable compensation for closely-held business owners and is used by CPA’s, EA’s, tax advisors, forensic accountants and valuators when they need to determine a reasonable compensation figure for a client.

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Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

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

Date + Time

  • event

    Friday, February 27, 2026

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

I. Reasonable compensation theory

II. IRS data and guidelines including Tax Court cases

III. Outside factors affecting compensation (401k, QBID, spouse, SSA benefits)

IV. RCReports: approaches for determining reasonable compensation

The panelist will review these and other vital issues:

  • Key court cases and IRS guidance on reasonable compensation
  • Identifying and correcting myths about S Corporation compensation, including the 60/40 rule
  • Applying the three IRS recognized methodologies - Cost, Market, and Income
  • Audit triggers and IRS documentation requirements

Learning Objectives

After completing this course, you will be able to:

  • Identify and correct myths about S Corporation compensation, including the 60/40 Rule and Safe Harbor assumptions. 
  • Apply the three IRS recognized methodologies—Cost, Market, and Income—to calculate reasonable compensation. 
  • Analyze key court cases and IRS guidance to understand how reasonable compensation is evaluated. 
  • Recognize audit triggers and IRS documentation requirements that increase the risk of reclassification and penalties.



  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.


BARBRI, 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 Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

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

BARBRI CE webinars-powered by Barbri-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. Contact us at 1-800-926-7926 .