What’s a John Doe summons

In most cases when a law enforcement agency wants information, it can use a summons, for instance, if it wants additional information from a taxpayer concerning details of their tax returns from specific years. A summons typically is issued by a court for an...

What is reasonable compensation? Pt. 2

Last week, we looked at the factors the Tax Court uses to determine if compensation paid to employee/owners of a company qualify as “reasonable.” In a case involving a concrete contractor, the court found that the five-factor test supported the...

What is reasonable compensation? Pt. 1

When a company pays employees, it is presumed to some degree, that it pays them only enough to prevent them from leaving and going to work elsewhere. This equation changes when the company is controlled by the individual being paid. The IRS often suspects owners are...