By Stephen D. Kirkland, CPA, CMC, CFF Yes, according to some published Tax Court cases, including Choate Construction Company, T.C. Memo. 1997-495. My report and courtroom testimony highlighted the fact that the founder had worked for minimal pay in the first years of the business. In his published opinion, Judge John Colvin (who later became…
Read more
Professional and Enterprise Goodwill
An incredible amount of value can be derived from a single idea or a single relationship. Relationships can be powerful in industries where owners have regular contact with customers, referral sources, suppliers and/or employees. The owners may have many good relationships and have outstanding reputations in their industries. These relationships and reputations are valuable intangibles…
Read more
Does Lack of Dividends Equate to Disguised Dividends?
In analyzing whether a C corporation’s payments to shareholder-employees were compensation or “disguised” dividends, the Internal Revenue Service and courts consider whether dividends were paid by the corporations. The Regulations say it is “likely” that a compensation payment is in fact a dividend distribution when excessive payments correspond to or bear a close relationship to…
Read more
(Un)reasonable Fees Paid by Qualified Retirement Plans
Under Internal Revenue Code section 404(c), plan sponsors have fiduciary responsibilities to protect the interests of the participants. Among these responsibilities is an obligation to ensure that fees charged to participants’ accounts are reasonable. This includes fees charged by investment managers, auditors, attorneys, advisors, and others. In recent years, high-profile lawsuits were filed against plan…
Read more
Recent Comments