Estate and Succession Planning
Dean Mead’s Estate and Succession Planning Department is one of the largest and most respected groups of estate planning attorneys in Florida. We are frequently…
Stephen R. Looney, Chair of Dean Mead’s Tax department, was a guest speaker at the 63rd Annual Tulane Tax Institute in New Orleans, LA on October 22, 2014. His presentation was titled, “Reclassification of Compensation Paid by C Corporations and Reclassification of Distributions Made by Corporations to their Shareholder-Employees”.
Mr. Looney discussed how the IRS and the Courts are addressing the reclassification of compensation and other payments to shareholders as dividends (unreasonably high compensation) in the context of C corporations, as well as how the IRS and the Courts are addressing the reclassification of distributions as compensation (unreasonably low compensation) subject to payroll tax liability in the context of S corporations. Mr. Looney also discussed the increasing application by the IRS and Courts of the so-called “independent investor test” to determine reasonable compensation.
