Discussion:Salary issues for 100% S/H in a C-Corp
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Revision as of 01:55, 6 July 2009
I have picked up a new client, he is a 100% S/H in a C-Corp a masonry contractor. He has to file a return for his last year in business, 9/07 to 8/08. The problem is he never took a salary for the year, but wrote checks to himself or cash in the amount of $145K. He is about to file bankruptcy for the Corp and personal this month. IRS is after him for prior taxes owed and not filing his 07 personal tax return. He told them that he had no income from the Corp. He had a payroll service file payroll returns for 07 and W-2s, but in 08 he made all his employees subcontractors, but never issued 1099s. My question is how do I treat his $145K and the payments made in 08 with no 1099s?
