S-Corporation Underpaid Employment Taxes by Paying Unreasonably Low Wages
Watson, P.C. v. U.S., (CA8 02/21/12) 109 AFTR 2d ¶ 2012-483 The Court of Appeals for the Eighth Circuit, affirming a district court, has concluded that an S corporation shareholder-employee’s $24,000 salary in 2002 and 2003 was unreasonably low. As a result, it allowed the IRS to reclassify as salary over $67,000 in dividend payments…