- 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...)
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