S Corporations
S corporation Under-compensation
The IRS continues to attack S corporation distributions as a method of avoiding payment of employment taxes and has been successful in a recent case. The IRS succeeded in reclassifying distributions as salary resulting in underpayment by the corporation of employment taxes. See Watson, P.C. v U.S. 109 AFTR 2d. © 2012 Parsonage Vandenack… Read More »
Benefits of Making an S Corporation Election
In an S Corporation, all income and losses are divided and passed through to its shareholders. The shareholders then report the income or loss of the corporation on their own individual income tax returns. A corporation can elect to be treated as an S Corporation by filing Form 2553. Eligibility restrictions to make the election… Read More »
