{"id":698,"date":"2012-05-31T14:23:18","date_gmt":"2012-05-31T19:23:18","guid":{"rendered":"http:\/\/hoorfarlaw.com\/blog\/?p=698"},"modified":"2012-05-31T14:23:18","modified_gmt":"2012-05-31T19:23:18","slug":"the-irs-continues-to-feast-on-s-firms-that-pay-very-low-salaries-to-owners","status":"publish","type":"post","link":"https:\/\/hoorfarlaw.com\/blog\/?p=698","title":{"rendered":"The IRS continues to feast on S firms that pay very low salaries to owners"},"content":{"rendered":"<p><a href=\"http:\/\/hoorfarlaw.com\/blog\/wp-content\/uploads\/2012\/05\/2.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-thumbnail wp-image-699\" title=\"2\" src=\"http:\/\/hoorfarlaw.com\/blog\/wp-content\/uploads\/2012\/05\/2-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" \/><\/a><\/p>\n<p style=\"text-align: center;\">In many cases, S firm owners take low salaries so they can receive the bulk of the corporation&#8217;s profits as dividends, which are not subject to payroll taxes. IRS and the courts balk at this practice. In a recent case, the CPA took a $24,000 salary in a year when this share of the S firm&#8217;s profits was around $200,000. A district court agreed with the IRS that his pay was unreasonably low and ruled that the dividends are properly reclassified as salary and are hit with payroll taxes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In many cases, S firm owners take low salaries so they can receive the bulk of the corporation&#8217;s profits as dividends, which are not subject to payroll taxes. IRS and the courts balk at this practice. In a recent case, &hellip; <a href=\"https:\/\/hoorfarlaw.com\/blog\/?p=698\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[87,85,16,86,84],"class_list":["post-698","post","type-post","status-publish","format-standard","hentry","category-general","tag-cpa","tag-dividends","tag-irs","tag-payroll-tax","tag-s-firm"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=698"}],"version-history":[{"count":2,"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/698\/revisions"}],"predecessor-version":[{"id":701,"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/698\/revisions\/701"}],"wp:attachment":[{"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hoorfarlaw.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}