Unreasonable Compensation to PC Shareholders: The IRS Gains a Victory

The general view has been that unreasonable compensation claims against shareholder employees of professional corporations was not an issue. In <i>Pediatric Surgical Associates P.C. v. Commissioner</i>, the Tax Court determined that compensation paid to the shareholder physicians was unreasonably high because it exceeded the value of the services performed. Many law firm professional corporations could face this same issue.

10 minute read September 26, 2008 at 05:06 PM
By
James D. Cotterman
Unreasonable Compensation to PC Shareholders: The IRS Gains a Victory

The general view has been that unreasonable compensation claims against shareholder employees of professional corporations was not an issue. In Pediatric Surgical Associates P.C. v. Commissioner (T.C.

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