Sean Moon is president, secretary, treasurer, sole director, and sole shareholder of Streetz, an S corporation real estate company. He manages all aspects of the companys operations, and he is the only person working at the com- pany that holds a real estate brokers license. Sean works 12-hour days and takes few days off. Streetzs gross receipts and net income figures were reported as follows.

Year Gross Receipts Net Income

2015 $376,453 $122,605

2016 405,244 161,660

2017 518,189 231,454

Sean and his wife, Kim, filed joint Federal income tax returns, but they did not report any wages or salaries on line 7 of their returns. During 2017, Moon transferred $240,000 from the S corporation to his personal account. You are an expert witness for the IRS. Identify the items you would present to the U.S. Tax Court with respect to the amount of Moons compensation that is subject to employment taxes and any other taxes due for the year 2017 (especially the Medicare net investment income tax). Hint: This is a reasonable compensation issue.