Bonnie and Clyde each own one-third of a fast food restaurant and both work full time in this business. Their daughter, Flapper is 15 years old and owns the other stock interests. Flapper is still in school and her parents make her work part time at the restaurant. Neither Bonnie, Clyde nor Flapper are paid a salary. During 2022 the ordinary income of the S corporation was $180,000.

An IRS agent visits the business and begins an audit. He suggests that reasonable salaries for Bonnie, Clyde and Flapper are $30,000, $35,000 and $10,000 respectively. What adjustments would you expect the IRS to impose upon these taxpayers?