- IRS Hot Button!!
- Billions of dollars in lost Social Security taxes
- Issue: In many cases, the Shareholder Compensation is not reasonable and customary for the job performed resulting in lower total social security taxes collected leading to:
- Resulting in readjusting compensation for years audited and increasing SS tax amounts plus penalties and interest, affecting the individual’s tax return.
- Compensation Must be Reasonable and Customary
- Includes base salary and bonus
- What is the job of the officer?
- How are like positions compensated in the same market area?
- What percentage of an average workweek does the officer work in that capacity?
- Written documentation is needed as back up to support how the compensation dollar amount was derived.
- Call Malvern Tax & Ledger, Inc. to assist you with this issue.
