- 4 - Year Distribution 1994 $56,352 1995 53,257 1996 83,341 C. Form W-2 In 1994, Mr. Barron received a salary from petitioner in the amount of $2,000. In contrast, Mr. Barron did not receive a salary from petitioner in either 1995 or 1996. For 1994, petitioner issued Form W-2 (Wage and Tax Statement) to Mr. Barron. The Form W-2 was issued in respect of the salary paid to Mr. Barron for that year. The form reflects the payment of wages and the withholding of taxes as follows: Wages/Withholding Amount Wages, tips, other compensation $2,000 Federal income tax withheld -0- Social Security wages 2,000 Social Security tax withheld 124 Medicare wages and tips 2,000 Medicare tax withheld 29 State wages, tips, etc. 2,000 State income tax withheld -0- The payment of wages and the withholding of taxes were for the fourth quarter of 1994. Petitioner did not issue a Form W-2 to Mr. Barron for either 1995 or 1996.3 3 The record suggests that other than for $2,000 of compensation in 1994, Mr. Barron reported income from petitioner as passthrough of S corporation income, pursuant to sec. 1366, on Part II of Schedule E (Supplemental Income and Loss) of his individual income tax returns. We note that a shareholder’s share of an S corporation’s income is not subject to self- employment tax. See Durando v. United States, 70 F.3d 548, 550 (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011