SALT LAKE CITY, UTAH – When it comes to IRS priorities and enforcement, Subchapter S-Corps and their owners/shareholders are at the top of its list. In a Treasury Inspector General for Tax Administration Report in 2021, the IRS reported that it will begin to turn up the heat on S-Corp owners who take little to no compensation. Why, with the federal government running financial shortfalls, the IRS has been charged with going after compensation tax so that the government can work on filling its coffers.
It's obvious why S-Corp owners want to take as little income as wages as possible, and we have found that both accountants, as well as owners, are unsure when the S-Corp owner has crossed that line. For years tax professionals, including myself, have had to try and navigate this minefield, either selecting a number based on the wages of the other employees, allowing the owner to select his or her compensation or wage, or having the owner pay for an actual study (this rarely if ever happens until after the IRS audit).
Over the next few posts, I will discuss S-Corp Comp, and hopefully provide some ideas on how to address this hot topic. Tax problems are legal problems, and we solve both. If you or someone you know has an issue with paying their federal or state taxes and needs help to end their IRS nightmare, please contact Kent Brown at Strong & Hanni by either phone at (801) 532-7080 or email at: kbrown@strongandhanni.com or go to https://activerain.com/profile/kbrowndad for additional information, or my personal Strong & Hanni webpage at: https://strongandhanni.com/attorneys/attorney-kent-brown/
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