Washington Payroll Tax Lawyer
Shareholders at S corps and similar business entities who are involved in the management of the business are required to be paid reasonable wages, and payroll taxes must be taken from those wages. W-2 forms must be completed for these corporate officers. They cannot simply take money from the company as payment. Doing so will lead to issues with the IRS.
The Bellevue, Washington, law firm of Lana Kurilova Rich PLLC provides representation to employers in the greater Seattle area, statewide and nationwide. If you have been contacted by the IRS about payroll taxes for corporate shareholder wages, or you suspect you will be, call us toll free at 866-418-3175 for a free initial phone consultation.
A Common Error for S Corps
Certified public accountants (CPA) who are not always well-versed in the differences between different business entities frequently fail to advise business owners about the requirement to pay shareholders (who are often also the business owners themselves) reasonable wages. This is because this is not a requirement of other business entities, such as LLCs and sole proprietorships. In some cases, business owners may pay shareholders a very small amount. The payment must actually be aligned with the wages paid to other shareholders in the industry, or the IRS will interpret it as a deliberate attempt to avoid payroll taxes.
This is not an ordinary IRS tax problem. When the IRS discovers this error, they will look at all of the money taken out of the business by the shareholders and use that as the basis of calculating payroll taxes. They will then add interest and penalties. If we can demonstrate that this was an error, we may be able to work with the IRS to achieve a reasonable settlement. That is our goal.
Call 866-418-3175 for a Free Initial Phone Consultation
We invite you to contact us today by phone or by e-mail to discuss your case with our experienced nationwide corporate shareholder wages attorney. Find out how we can help.
