Most S corporation owners know the rule: if you work in your corporation, you must pay yourself a reasonable salary before taking the rest of your profits as distributions.1

Fewer realize the owner is not the only one exposed when the salary is missing. The tax return preparer can be penalized too, on a per-return and per-year basis.2

In the reprinted article below, tax attorney Eric L. Green tells the story of a CPA who never ran his clients’ payroll or kept their books, and who had urged them for years to take salaries. The IRS still assessed $130,000 in preparer penalties across 13 clients and two tax years, and ... Log in to view full article.