Question
Jacob is president, secretary, treasurer, sole director and sole shareholder of Greene, an S corporation accounting practice. He manages all aspects of the company's operations,
Jacob is president, secretary, treasurer, sole director and sole shareholder of Greene, an S corporation accounting practice. He manages all aspects of the company's operations, and he is the only person working at the company that holds a CPA license. Jacob works 12-hour days and takes few days off. Corporate records indicate the following:
Jacob and his partner, Micahel filed joint income tax returns, but they did not report any wages or salaries on their returns. During 2016, Jacob transferred $125,000 from Greene to his personal account.
Jacob has hired an accountant this year to prepare his and Micahel's personal tax returns as well as the corporate tax return for Greene Corporation. Prepare a memo to the file indicating the issues an accountant have identified based on the above fact pattern supporting your conclusion with proper tax authority.
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