For the majority of shareholder-employees, the Reasonable Compensation figure calculated in this report should not require adjustments. However there are circumstances, rules and situations Tax Prose may take into consideration before recommending a final Reasonable Compensation figure. The list below is not exhaustive and Tax Prose may make adjustments for circumstances and situations not listed.
Compensation of Non-Owner Employees 
Salary History
Travel Requirements
Personal Guarantee of Debt
Key Relationships and/or Contracts 
Financial Condition of Company
Distribution History
The courts have used a variety of factors to "stress test" Reasonable Compensation figures. Four well recognized lists of factors are below. Tax Prose may stress test your Reasonable Compensation figure against some or all of the factors used by the courts and the IRS and recommend adjustments
- The IRS Nine Factors Considered by Tax Courts: IRS Fact Sheet 2008-25
- The Tax Court’s Five–Factor Test: LabelGraphics, Inc. v. Commissioner, T.C. Memo 1998–343 (Sept. 28, 1998)
- The Tax Court’s Ten–Factor Test: Brewer Quality Homes, Inc. v. Commissioner, T.C. Memo 2003-200 (July 10, 2003)
- Summary of Court Factors used to "Stress Test" Reasonable Compensation Figures: Summary
Additional information and help on the issue of Reasonable Compensation for S Corporation owners can be found at:
IRS: S Corporation Compensation and Medical Insurance Issues IRS: S Corporation Employees, Shareholders and Corporate Officers
IRS Fact Sheet 2008-25: Wage Compensation for S Corporation Officers
Additional Resources:
Job Aid for IRS Valuation Professionals
Reasonable Compensation: Application and Analysis for Appraisal, Tax and Management Purposes. By Ronald L. Seigneur and Kevin R. Yeanoplos