RCReports Frequently Asked Questions (FAQs)
Thank you for visiting the FAQ page for RCReports. If you're unable to find the answer you are looking for, please contact us at 1-503-479-8200 or customerservice@bvresources.com and we are happy to help.
Q: How many reports can we run?
A: You can run as many reports as you need. There are no limits.
Q: Can we have multiple users?
A: Yes. Please see the available subscription options here for more details.
Q: RCReports Resource Library?
A: The RCReports Resource Library contains a wealth of information about Reasonable Compensation matters, including white papers, IRS guideline and court findings.
Q: What is the RCReports Referral Network?
A: The resource network, available to subscribers, matches your firm with potential clients in your area that need Reasonable Compensation assistance.
Q: What is a Premium Referral Network Listing?
A: Your premium listing in the RCReports Referral Network, available to Premium and Enterprise subscribers, includes options for your logo, web link, and a designated contact and phone number.
Q: Are Private Brand Reports Available?
A: Yes - give your Reasonable Compensation reports a polished professional look by including your firm name and logo on each report.
These reports are only available to Premium and Enterprise Subscribers. If you are a Basic subscriber and would like to upgrade to utilize this feature, please contact BVR Customer Service.
Q: What are the Warp Speed Wage Query Tools?
A: The Warp Speed Wage Query is a toolbox for instant access to cross-industry wage data, as well as industry-specific wage data and the Independent Investors Test.
These tools are only available to Premium and Enterprise Subscribers. If you are a Basic subscriber and would like to upgrade to utilize these tools, please contact BVR Customer Service.
Q: Can I Suppress Instant Report Delivery?
A: Yes - you have the option to prevent showing your clients reports which allows you to review the draft report and formulate suggestions or comments for your client prior to sharing the report with them.
This function is only available to Premium and Enterprise subscribers. If you are a Basic subscriber and would like to upgrade to utilize this function, please contact BVR Customer Service.
Q: What Is the Tax Compliance C Corp Report?
A: This report is designed to help C Corps meet the IRC section 162 requirement that compensation be ordinary, necessary and reasonable.
Q: What Is the Tax Compliance S Corp Report?
A: Addresses the IRS requirement that shareholder-employees of an S Corp pay themselves Reasonable Compensation for the work performed for their company.
Q: What Is the Normalization for Valuation Report?
A: Helps Valuators support the normalization of owner's compensation, this report provides an independent, unbiased estimate of the value of services rendered to the company by the owner.
Q: What is the Planning Report?
A: Normalizes compensation for owners and key management of closely-held businesses. Planning reports can be used for a wide range of issues such as: Entity Planning, Shareholder Disputes, Deferred Compensation, etc.
Q: How many professions are covered in RCReports?
A: RCReports offers two wage databases. The industry-specific wage database includes general managers and chief executives and is used exclusively for RCReports' market approach reports. The cross industry database, used in the RCReport's cost approach, covers more than 850 occupations cross-referenced by just under 7,000 titles.
Q: How many industries are covered in RCReports?
A: RCReports covers all NAICS industries at the two and three digit level using the market approach. Industry is not taken into account when using the cost approach as that relies on the cross industry database.
Q: How often is the data updated throughout the year?
A: The data in the platform is typically updated 3 to 4 times each year, dependent on when the government data is released and whether there are any changes to the algorithms used in RCReports.
Q: I notice that RCReports uses adjusted gross profit instead of revenue. What is adjusted gross profit and why is that measure used?
A: Adjusted gross profit is gross revenue less the direct cost of producing this income. The direct cost of producing income is all expenses that have a one to one relationship to producing income. This concept is like but not identical to gross profit. Adjusted gross profit is a more reliable gage of small-to-medium size businesses’ revenues a reasonable compensation parameter—learn more here.
Q: What size companies can I determine reasonable compensation for using RCReports?
A: RCReports can determine reasonable compensation for small and medium closely-held business owners from start-up to those with $25m in adjusted gross profit and up to 250 employees.
Q: Does RCReports provide the sample size for the number of firms used to create reports?
A: RCReports data sets are what the courts refer to as a black box system. This means RCReports does not disclose its proprietary processes and algorithms for determining reasonable compensation. Because RCReports reasonable compensation figures rely on more than one simple data point, providing a sample size for a particular compensation figure is not possible. RCReports wage estimates are sourced from survey data derived from a statistically representative sample of 1.2 million establishments. RCReports professional statisticians have verified that a compensation estimate for any particular occupation can be obtained within a 90% to 95% level of confidence.
In every IRS examination and court action to date, RCReports’ reports have been accepted when backed up by RCReport’s methodolgy report. RCReports believes the key reason for this success is because the foundation for its data is all government survey (BLS, Census, and State Department of Labor) data. These wage data sets are the gold standard for scientific collection, research and accuracy.
Q: After creating a report, why do they lock from modification after 30 days?
A: RCReports instituted the lock feature after receiving feedback from former IRS agents and attorneys. Reports lock after 30 days for credibility. If, for example, a report could be modified 3 years from now to fit a new paradigm (such as if the client is in court going through a divorce), RCReports may not be viewed as credible. A similar scenario would apply to reports prepared for the IRS.
Q: Can We Designate Alternate Administrators?
A: Yes. Subscribers can share the load by designating alternate administrators for their account.
Q: Can I Share My Clients with My Team?
A: Yes. Subscribers can allow selected users to share access to clients assigned to other users.
Q: Can We Re-assign Clients to New Users?
A: Premium subscribers can easily balance workload and staff changes by reassigning selected clients to another user.
If you are a Basic subscriber and would like to upgrade in order to utilize this feature, please contact BVR.
Q: Can I run reports for previous years?
A: Yes, the wage database includes wages from 2001 to the present.
Q: What should I consider when selecting proficiency?
A: Picture yourself in a room of 100 peers who perform the same task. How would you rate yourself among the 100 people in the room? Bottom 10% rate proficiency low, top 10% high and so on. Rating proficiency is a judgment call, but it is based on some perception of how well one performs a particular task.
Q: What is included in the reasonable compensation figure?
A: Reasonable Compensation figures include taxable Medicare wages and flexible spending accounts. Reasonable Compensation figures do not include non-taxable fringe benefits such as health insurance, vehicle or vehicle allowance, stock options, company loans and other items not reported on a W-2 as Medicare wages.
Example 1: (S Corp)
- Cash available for reasonable compensation, health insurance payments and distribution $130,000
- Reasonable compensation based on RCReports $80,000
- Health insurance $15,000
- In this example
- Line 1 and 16 of the W-2 would reflect $95,000
- Line 3 and 5 of the W-2 would reflect $80,000
- The taxpayer would have distributions of $35,000
Example 2: (S Corp)
- Cash available for reasonable compensation, health insurance and distributions $85,000
- Reasonable compensation based on RCReports $80,000
- Health insurance $15,000
- In this example
- Line 1 and 16 of the W-2 $85,000
- Line 3 and 5 of the W-2 $70,000
- The taxpayer would have distributions of $-0-