Here is the synopsis of our sample research paper on Tax Considerations in Corporations and Partnerships. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
A 7 page paper discussing the matter of "reasonable compensation" and its implications in C corporations, subchapter S corporations and partnerships. Individuals whose businesses are incorporated need to ensure that their companies pay them market-rate salaries. Bibliography lists 6 sources.
Page Count:
7 pages (~225 words per page)
File: CC6_KSacctTxCS.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
of the form a business takes, the IRS wants to see salary paid in ways that will maximize the amount of tax that the individual or corporation pays. Salaries
paid by C corporations are deductible to the organization, but dividends are not. Partners in a partnership pay the taxes owed by that organization, so the issue of reasonable
compensation is not as great under that business form. Likely it is the subchapter S corporation that gains the greatest level of direct IRS scrutiny. Fellows and Jewell
(2006) write that an "analysis of recent rulings and decisions on the topic gives taxpayers little hope of circumventing the reach of the IRS on this issue." Corporate Structure
Advantages of the corporate form of business ownership are that owners are protected from the liabilities that the corporation incurs, which makes it an
attractive business form for business owners "who run a risk of being sued by customers or clients or piling up a lot of business debt, or who have a lot
of personal assets they want to protect from business creditors" (Henry, 2005; p. 72). The greatest disadvantage is that the corporation is subject to greater regulation and may pay
higher overall taxes. A caveat in establishing a corporation is that the IRS will seek to minimize salary paid by a C corporation though it will seek to maximize
the salary paid by a subchapter S corporation. C Corporation Klein (2006) reports that "Generally, on audit, the IRS will look to see
if salary to owners is too high (for C-corporation owners) or too low (for S-corporation owners)." Too-high salary in a C corporation increases the amount of tax the individual
...