Ron is CEO of and owns 100 percent of WT Enterprises, a cash- basis, calendar-year corporation. The company has always been profitable but over the last five years Rons salary has increased from over $400,000 per year to over $1,000,000 and it has failed to pay dividends. Which of the following will not occur if the IRS determines that $500,000 of his salary is unreasonable?

Ron will pay an additional tax on the $500,000 re-characterized as dividend.

Ron will be eligible for a refund of Medicare taxes.

WT will lose a $500,000 deduction for the re-characterized dividend.

WT will be eligible for a refund of a portion of FICA taxes paid.