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Steve Looney Speaks at 63rd Tulane Tax Institute in New Orleans

Published: October 24th, 2014

By: Stephen R. Looney

Stephen R. Looney, Chair of Dean Mead’s Tax department, was a guest speaker at the 63rd Annual Tulane Tax Institute in New Orleans, LA on October 22, 2014. His presentation was titled, “Reclassification of Compensation Paid by C Corporations and Reclassification of Distributions Made by Corporations to their Shareholder-Employees”.

Mr. Looney discussed how the IRS and the Courts are addressing the reclassification of compensation and other payments to shareholders as dividends (unreasonably high compensation) in the context of C corporations, as well as how the IRS and the Courts are addressing the reclassification of distributions as compensation (unreasonably low compensation) subject to payroll tax liability in the context of S corporations. Mr. Looney also discussed the increasing application by the IRS and Courts of the so-called “independent investor test” to determine reasonable compensation.