Each year the IRS generally determines certain areas or segments their research shows is not being complied with like they would like. They then focus on that area to increase taxpayer education as well as generally more audits to increase compliance.
S-Corps made the list this year. The primary focus appears to be on distributions. Were distributions made properly, were they taxed if no basis was in the S Corp, is owner/officer salary reasonable.
If you have followed me for a while, you know I have been preaching that S-Corp owner & officer salaries must be reasonable. In some cases, the owner may be taking out a less than a reasonable salary for the work they perform or no amount at all.
If you own an S-Corp now is the time to make sure your salary is reasonable and that your distributions are properly accounting for & that you are prepared for an audit.
Our firm can provide a reasonable salary report to defend your salary, can help you with distributions and can provide you with guidance on how to prepare for and survive an audit.
For guidance on the new Trump, tax law grab our The 7 Essential “Post Tax Reform” Business Tax Strategies