Tax Court and S Corporation Wages
December 31, 2012 | Tax Laws
Tax Court and S Corporation Wages A recent tax court case, David E. Watson, P.C. v United States, has upheld the IRS re-characterization of S corporation distributions as wages. The individual shareholder-employee in the case, David Watson, CPA, was a partner in an accounting firm. Watson made a mistake in the level of compensation he was entitled to for his business. In 2002, Watson received a salary of $24,000, but was receiving $203,... CONTINUE READING