True or False - Explain your answers

1. Cash compensation is not as important in closely-held corporations then it is in other forms of corporate organization.

2. Use of cash compensation avoids complex IRS rules, unlike other forms of compensation.

3. The IRS does not usually question reasonableness of compensation if salaries are not particularly high.

4. Excessive payments for salaries or compensation become taxable as ordinary income to the recipient.

5. Reimbursement agreements are an effective way to avoid the IRS