Reasonable compensation has been a relatively hot topic this year. Charles Allen previously discussed the Blossom case in which the taxpayers were penalized for understating the compensation of the two owners/officers of an S corporation.[1] While Charles’s discussion focused on employment taxation, Josh Sage followed up with an article on the resulting income taxation consequences…
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In a recent Tax Court case, the Court determined that corporate officers were indeed employees of the corporation entitled to reasonable compensation, and as such, the corporation is liable for employment taxes on reasonable compensation imputed to the corporate officers.[1] Mr. and Mrs. Hacker, who owned 51% and 49% of Blossom Day Care Centers (“Blossom”)…
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The United States District Court for The Western District of Virginia recently granted the government a default judgment against a law firm for nearly $220,000, plus interest and penalties, in unpaid federal employment taxes and unemployment taxes. U.S., v. Miller Law Group, P.C., et al.,[1] is a perfect example of one of the worst ways…
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