IRS attacks exec comp: Know top 5 red flags — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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If you're an owner/executive of a C corporation, it's time to sit down with your tax adviser to see if your compensation passes IRS muster.

Reason: Part of the IRS' rejuvenated audit effort (see story below) includes a new program to measure compliance and target abuses related to executive compensation. As a result, IRS auditors will pay more attention to compensation arrangements of business owners and top management on corporate tax returns.

The IRS is red-flagging the following five forms of compensation. That doesn't mean they're off-limits; it just means you should expect the IRS to examine them closely this year and in upcoming years. With that in mind, you may need to restructure the deal.

1. Nonqualified deferred compensation. In particular, the IRS will eyeball the timing of deductions for deferred amounts. The agency wants to make sure that the deduction has been postponed until the employee recogniz...(register to read more)

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