An IRS attempt to reclassify payments to an S firm owner is partially rebuffed. An S corporation paid its co-owner $60,000, but treated only $2,400 of it as wages. The balance was ostensibly reimbursement for cash advances he made to employees to cover their business expenses. IRS classified $55,000 as salary subject to FICA. The Tax Court agreed that $2,400 was too low a salary. But, because part of his pay was used to reimburse workers, the Court said his average pay for the past five years… $30,000 …was appropriate for payroll tax purposes (Herbert, TC Summ. Op. 2012-124).