Discussion:S-corp - Help to cleanup

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Discussion Forum Index --> Tax Questions --> S-corp - Help to cleanup

ArchCPA (talk|edits) said:

16 April 2006
I've a client who purchased a manufacturing unit 4 years ago through his S-corp. He is a sole stockholder and works in this company full time. Company has been very profitable for the last four years. Based on bad advice from his former CPA, he has been taking distributions from the company - he has no salary income. Wife is on the payroll with other employees and she makes a nominal salary each month for administrative support.

Effective this year, based on my recommendations, my client has been drawing a regular monthly salary (based on the prevailing wage for a small business CEO). My question is how do I shield my client from any potential audit in the future?

Natalie (talk|edits) said:

16 April 2006
It sounds like you are on the right track by putting him on a salary. Are there other issues you are concerned about?

ArchCPA (talk|edits) said:

16 April 2006
That's the only issue that I'm concerned about.

Tctaxserv (talk|edits) said:

April 17, 2006
Unfortunately no way to clean up prior years. Keep taking salary going forward and hope IRS never audits.

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