RESEARCH MEMO
Our new client is President and sole shareholder of Techstar Inc. a small but rapidly
growing C Corporation that manufactures and sells electronic components. The
President's compensation for the current year is $ which includes both
salary and bonuses. I am concerned that if the IRS where to audit Techstar Inc. that
they would raise the issue of unreasonable compensation for the President. Please
submit to me a well thought out memo to pages on the following:
How might the IRS claim that a portion of the President's compensation is
unreasonable?
What specifically could we suggest to help our client mitigate the potential
unreasonable compensation issue raised by the government?
NOTE: You may use any and all materials including but not limited to the textbook, RIA
Checkpoint, the IRS website, IRS Code and REGS., Case law
