Should an S Corporation’s Payment of Its Owner’s Personal Expenses be Considered as a Disguised Wages
In Scott Singer Installations, Inc. v. Commissioner of Internal Revenue (T.C. Memo. 2016-161), the Tax Court has to decide: Whether Mr. Singer should be classified as Scott Singer Installations Inc.’s employee for employment tax purposes, and Whether the S corporation’s payment of Scott Singer’s personal expenses should be characterized as wages subject to Federal employment […]
06/11/2021
In Scott Singer Installations, Inc. v. Commissioner of Internal Revenue (T.C. Memo. 2016-161), the Tax Court has to decide:
- Whether Mr. Singer should be classified as Scott Singer Installations Inc.’s employee for employment tax purposes, and
- Whether the S corporation’s payment of Scott Singer’s personal expenses should be characterized as wages subject to Federal employment taxes
The Tax Court has determined that Scott Singer intended his advances to be loans. And as a result, Scott Singer’s personal expenses the company paid on his behalf are loan repayment, and should not be characterized as wages subject to employment taxes.
Please contact us to find out how the Court’s decision may benefit you if you running your business and you are putting money into the company to finance its growth.
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