When IRS examiners audit S corporation owners, do they make sure the owners are paying themselves reasonable compensation? Not always, according to a recent report from the Treasury Inspector General for Tax Administration (TIGTA). It looked at how S corp owners report their own compensation. At issue is whether the owners are “motivated to underpay or not pay themselves” to avoid paying employment taxes. TIGTA found that less than 1% of S corp returns are audited and nearly half of those audits don’t examine compensation. Audits of single-shareholder owners from 2016-2018 estimate that nearly $25 billion in compensation may have gone unreported. Here’s the report: https://bit.ly/3n0JIYq 


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