IRS Challenges the Salary of an S Corp Owner

The IRS challenged the salary of an S Corp owner. The IRS maintained the owner’s salary was unreasonably low, and that a portion of distributions should have been classified as salary, and should be subject to FICA tax. The 8th U.S. Circuit Court of Appeals heard the case and upheld the lower court’s decision that sided with the IRS. Here is a link to an article in the Journal of Accountancy with more information. See more from the Journal of Accountancy here.