Page 16 THE MALDEN ADVOCATE–Friday, November 18, 2022 ~ Mystic Valley Regional Charter School Sports ~ Girls Soccer Drops Second Match of Playoffs J By Emily Brennan REASONABLE COMPENSATION FOR S CORP SHAREHOLDERS T he IRS is beginning to select a certain amount of S Corporations for examination to make certain they are complying with paying stockholders who work for the corporation a reasonable salary which in turn translates into paying a reasonable amount of payroll taxes assessed on the salary. The IRS will be looking at three types of distributions to S Corporation shareholders. 1. Those of appreciated assets where the S Corporation fails to report the gain on sale of that asset in the fi rst place; 2. When an S Corporation fails to report a distribution to a shareholder as a taxable dividend when required to do so, and 3. When a shareholder fails to report a non-dividend distribution as a taxable capital gain when the distribution exceeds his or her stock and loan basis in the S Corporation. With the IRS now receiving an estimated $46billion in additional funding towards its enforcement efforts, S Corporations need to maintain very accurate books and records, keep track of stockholder basis and loan basis, and be sure to report taxable transactions properly. Calendar year 2022 returns fi led on or before March 15, 2023 will still be susceptible to an income tax audit on or before March 15, 2026. This will give the IRS virtually three years to train their newley-hired auditors just in time to still be able to audit 2022 calendar year tax returns. Certainly, 2023 calendar year returns and thereafter will be even more likely to be audited. S Corporation profi ts above and beyond owners’ salary that are distributed to the stockholders are not subject to payroll taxes. This is not the case with partnerships. All of a partnership’s ordinary net income from a trade or business is subject to self- employment taxes. The IRS has created a fact sheet that serves as a guide for its agents to determine whether or not an S Corporation’s shareholder’s salary is reasonable. The IRS wants to collect payroll taxes on all wages in order to fund the social security system. If a S Corporation shareholder actively works in the business and does not take any salary at all, more likely than not, the IRS will eventually catch up with that S Corporation and will look to reclassify most, if not all, of the stockholder distributions as salary and then assess the S Corporation for the requisite amount of payroll taxes. Interest and penalties would also be assessed. The IRS FS (fact sheet) 200825 sets forth a guideline for agents to use in order to determine a reasonable salary such as duties and responsibilities, time and eff ort devoted to the business, salaries paid to non-stockholder employees of the business, what comparable businesses are paying for the same level of service, etc. With the Democrats maintaining the Senate, it does appear as thought the IRS will indeed be funded with an additional $86 billion, with $46 billion earmarked towards enforcement. Joseph D. Cataldo is an estate planning/elder law attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a master’s degree in taxation. unior Reilly Hickey scored four goals for MVRCS at home against Burke High School as the Eagles won, 7-0, in their fi rst playoff match on the 2022 campaign. Following the Burke win, the Eagles fell to Maynard High School (0-1), eliminating them from advancing to the next round. The Eagles came out of the gate against Burke aggressively, rattling off the fi rst two goals of the match, one each from captain Hickey and freshman Lucia Antonucci. Over the fi nal 25 minutes of the opening half, Hickey and Antonucci each would generate another score with a strong 4-0 lead going into the half. Sophomore center back Lady Eagles senior goalkeeper Caroline Crowley Bailey DeLeire fi red into the net to start the second half, assisted by center back Alice Jones. Jones followed that up with two more assists, both to Hickey, giving the Eagles a 7-0 win. The win was comfortable, as senior goalkeep~ LEGAL NOTICE ~ NOTICE OF FUNDING AVAILABILITY (NOFA) American Rescue Plan Act Funds Available for Vacant Property Acquisitions NOFA RELEASED: QUESTIONS DUE: ADDENDUM RELEASED: APPLICATIONS DUE: APPLICATION OPENING: NOVEMBER 9, 2022 AT 10:00 A.M. DECEMBER 1, 2022 AT 10:00 A.M. DECEMBER 1, 2022 AT 4:00 P.M. DECEMBER 12, 2022 AT 10:00 A.M. DECEMBER 12, 2022 AT 10:00 A.M. DELIVER SEALED APPLICATIONS TO: Malden Redevelopment Authority 215 Pleasant Street, Third Floor Malden, MA 02148 The City of Malden has received $45.7 million in American Rescue Plan Act (ARPA) Local Fiscal Recovery funds and has granted $2 million to the Malden Redevelopment Authority (MRA) to acquire, rehabilitate, and sell vacant properties as affordable homes to income-eligible households. The MRA is accepting applications from qualified applicants for the acquisition of vacant properties. Applicants must be owners of vacant property located in the city of Malden. Applications are available upon request. Applications are due on December 12, 2022 at 10:00 A.M. The City’s Office of Strategic Planning and Community Development (OSPCD) will review applications for accuracy and completion. OSPCD staff may request additional information after an application has been received. Please submit any application requests or questions in writing to OSPCD Housing Program Coordinator Kristina Tseng at ktseng@cityofmalden.org with “Vacant Properties Acquisition” in the subject line. er Caroline Crowley earned her second consecutive clean sheet. Advancing to the second round of the MIAA Playoffs, Maynard comfortably controlled SPORTS | SEE PAGE 19
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