tag:blogger.com,1999:blog-97685134337018982.post1602774194578676258..comments2024-01-15T09:13:26.421-08:00Comments on PNWC's Government Contracting Update: "Fatally Flawed" Compensation Audit - Part 2Paul D. Cederwallhttp://www.blogger.com/profile/08210528610954446990noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-97685134337018982.post-20037457081904205112012-02-20T08:35:05.850-08:002012-02-20T08:35:05.850-08:00Thanks for the comment and the reference. There ar...Thanks for the comment and the reference. There are significantly different standards regarding the reasonableness of compensation for government contracting purposes and income tax purposes. For contracting, the Government seeks to reimburse a reasonable wage/salary. For income tax purposes, the IRS seeks to find if a taxpayer is doing something unreasonable for the sole purpose of avoiding income taxes.Paul D. Cederwallhttps://www.blogger.com/profile/08210528610954446990noreply@blogger.comtag:blogger.com,1999:blog-97685134337018982.post-1649741191008384672012-01-31T14:17:54.040-08:002012-01-31T14:17:54.040-08:00The IRS litigates this issue when it perceives com...The IRS litigates this issue when it perceives compensation is excessive. In the DCAA/DCMA excessive compensation assertion, the Board ruled primarily on the persuasiveness of the contractor's expert. To your knowledge, has anyone attempted to bring the IRS and Contract Auditors to a uniform test/position on the topic? See<br />http://caselaw.findlaw.com/us-7th-circuit/1082767.htmlEd Zaremsk, CPAnoreply@blogger.com