RC Reports holds webinars you can sign into for free, and they (used to) record them and offer some of them for free. I would not sign up for a service unless you have a high volume need, because there are so many  public resources available and RC Reports has amazing reference materials, too, but you might not need all of that. RC excels at the legal-related issues, though, which can be helpful in sticky situations.

When the IRS announced they were going to focus specifically on S Corps, distributions, and reasonable comp, a lot of people sat up and took notice. Especially some functional changes such as not being able to pay for Medical Premiums as distribution (needs to run through the W2) and other cost categorization issues that are limited by the "2%" or "10%" shareholder status. There was a lot of (personal) cost shifting that did not withstand scrutiny. Yet, there still is some bad advice out there, mostly old school concepts.

The first thing I do is discuss with a client how much this can hurt if they want to play a game with the IRS: Penalty and interest along with late fees for payroll tax and payroll reports, when the IRS decides to recharacterize distributions as, "you attempted to avoid payroll."

The amount of work for due diligence from there really depends on how cooperative your taxpayer intends to be. They know what they do and what that would be worth in the marketplace. They should be able to project what it would cost to pay someone to replace all of that, as well. You can reference BLS and other labor databases. My State has good resources, a worker comp insurance agent can be helpful, and my local Job Service/Workforce Center, where they handle job fairs and unemployment management, is another great resource.

If your client is going to lean hard on you to provide all the info, you need to feel comfortable with carrying the load if they do get audited for payroll. I cautiously lead clients through this process to the end where they clearly made the final decisions (and document it), so that it never comes back at me. That includes identifying their workload by time spent and by tasks and by levels of responsibility. Another metric that works well is cost for risk of failure or errors. Sometimes it is value or price of tools, equipment and materials used in the course of the work, and if there is any specific licensing or certifications required, and if they need to be annually maintained or Continuing Ed. The more complexity, the more $ value, the easier it is to point the client into not undervaluing their work.

Don't tell me you operate a $3m robotic thingy that burns through $30,000 consumables, and you rent a crane to be onsite with a licensed operator for you to do your thing, you had to be trained 90 days at the vendor's shop to be certified to run that robot, but your salary would be $20,000 annually.

Another example:

A designer with a small showroom isn't a licensed architect, but does drafting and has plans signed by an engineer or subcontracts to architects. They charge relative to the scope of work, and if employed by a licensed firm, would hold a mid-level position in a design/build firm. So, reasonable comp is higher than draftsman, lower than senior architect, and might get some compensation through materials markup (sales associate). Based on the performance of their S Corp, you would set a reasonable salary that shows volume of work is taken into consideration, and being highly profitable might reflect some of the "sales associate" revenue portion of compensation, and then there would possibly be distributions.

Distributions are not as frequent as payroll, not relative to payroll or in lieu of payroll, not based on hours or work performed. I recommend something like a quarterly P&L analysis. Year end would be the same as a company bonus program, determined as part of a management decision (could be year end annual meeting and in the minutes). Also, bonuses in some industries are based on project completion, that is easily justifiable, but that is payroll and not distribution "bonus."

In other words, does it look right, does it make sense, will it withstand scrutiny? If hemming-and-hawing, then start again.