Comparison
RCReports vs. the Mello RC Elite Memo
Two approaches to the same problem: documenting your S Corp reasonable compensation so it holds up if the IRS asks. One is software-generated. The other is written and signed by a licensed Enrolled Agent. Here is what each one actually delivers, what it costs, and which one fits your situation.
What Is RCReports?
RCReports is a cloud-based software platform that generates reasonable compensation reports for S Corp owners. Tax professionals subscribe to the platform, enter client data, and receive an algorithmically generated report that estimates what the owner-employee should be paid based on their role, industry, and geography. Reports are generated in minutes and delivered as a PDF.
RCReports is designed for volume. A CPA firm with 50 or 100 S Corp clients can run reports quickly without spending hours on each one. The tradeoff is that the output is standardized, not customized to your specific facts.
What Is the Mello RC Elite Memo?
The Mello RC Elite Memo is a 26-page written memorandum prepared and signed by a licensed Enrolled Agent. It walks through each of the nine factors the IRS publishes for evaluating reasonable compensation, applied to your own facts, your own business, your own hours, and your own market.
Every wage figure comes from published Bureau of Labor Statistics data. The analysis includes an authority table with every cited case checked against a commercial citator, an independent investor analysis, a time and effort breakdown, and a signed opinion under Circular 230. It arrives with contemporaneous documentation: a compensation resolution, written job description, time allocation record, and distribution log.
Side-by-Side Comparison
| Feature | RCReports | RC Elite Memo |
|---|---|---|
| Format | Software-generated PDF | 26-page written memorandum |
| Prepared by | Algorithm | Licensed Enrolled Agent, signed |
| Length | 3 to 8 pages | 7 / 12-13 / 26 pages |
| Wage data source | BLS + proprietary database | BLS OEWS only, release cited |
| Nine-factor analysis | Summary/checkbox | Full written narrative per factor |
| Case law citations | Not included | Authority table, citator-checked |
| Signed opinion | No | Yes, under Circular 230 |
| Corporate docs | Not included | Resolution, job desc, time log |
| Turnaround | Minutes | 5 business days |
| Pricing | $89-160/report | $495 (Basic) / $895 (Standard) |
When the RC Elite Memo Makes More Sense
- Your salary is on the lower end. The further below the median, the more important the written reasoning becomes.
- You wear multiple hats. Software picks the closest single occupation. A memo explains blended roles.
- High audit risk. Distributions significantly exceeding salary draw IRS attention.
- You want the corporate record complete. Compensation resolution, job description, time log.
- Going through a transaction. Buyers and lenders want signed professional documentation.
Frequently Asked Questions
Can I have both?
Yes. Some clients have an RCReports report from their CPA and also commission the RC Elite Memo for their corporate file. Having both is stronger than having either alone.
Does RCReports hold up on audit?
It can support your position as one data point. The IRS examiner will give more weight to a signed professional analysis that addresses the specific factors they are trained to evaluate.
Is ScorpConvert affiliated with RCReports?
No. ScorpConvert is a service of Mello Tax Group, LLC. We have no affiliation with RCReports, Inc. This comparison is based on publicly available information.
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