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Obviously there is a due diligence question here. If it had been just one client, it would probably have never happened. It appears that he was targeted because he had multiple clients in this situation. Years ago I picked a new client, an 1 employee S Corp who had an appliance repair business. At the time I picked him up he had a very low monthly salary which was not reasonable. It took me 4 or 5 years gradually raising his monthly salary bit by bit before it was at the low limit of reasonable. It took me that long because he had cash flow limitations due to spending everything he made.

This is the one I hear as the prime excuse. Nothing left to pay myself. But inevitably, they take distributions in some manner, such as expense reimbursement, medical insurance, car lease, etc. Some just cannot grasp they have to pay themselves wages at least min wage for all time worked, overtime when required, THEN, if there is anything left, other things can be paid. I try to remind that they must treat themselves the same as a stranger employee, to deaf ears. If there really is no money coming in, then they can pay themselves as a payable, equity, or whatever their accountant prefers. Not that I do tax returns for others. It comes up when someone asks me how to create a one off check for the prior year, or an end of year check to cover wages or to make withholding.

I found it odd, in all the years as a tax preparer, reading, tax seminars etc... I have never heard of the IRS penalizing the preparer for a "reasonable salary" until this story. I see myself and other preparers dropping their non-payroll 1120S clients.

Seems like a real story about reasonable compensation. https://rcreports.com/blog/tax-man-cometh/?mibextid=Zxz2cZ

Can find anything either way. For a $203 "donation", I would inclined to take let the client decide how much risk they want to take for a small reduction in tax. Just make sure they have everything in writing.

13! clients with sketchy shareholder(s)? A pattern which should be penalized imo. It is not hard to see what comps are with a novice online search. Or even something like the salary exempt (the assistant manager scam threshold) or some reasonable multiple of min wage x X #40 hour weeks per year. For me, I always pose the question to the shareholder to prove out why they should not be aiming for SS limit wages each year before taking a dist. Those who are scamming RC are not likely setting up a retirement plan which beats SS when considering all SS benefits (spouse, children, disability, survivors, SSDI for disabled child).

Wow! I'm glad I no longer do business returns, especially S-corps. At least the few that I did do had something close to a reasonable salary. It's sad how much we are being held responsible our client (mis)behavior even after the fact. It seems, in this case, unless the client self-prepared the corp return, any preparer would be held liable even if for a new S-corp client.

Access to the stored data is a k own risk. The safety is in self encrypting before storing the data. Some of the backup companies claim they encrypt with no access to the key, but just in case, self encrypt.

That was spionage and 25 companies were affected. No matter where you data resides if one of your employees hands its password or ways to infiltrate your company, this will happen. As long as there are users with less brain than the scammers, these problems will exist.

"Last month, U.S. government safeguards identified an intrusion in Microsoft's cloud security, which affected unclassified systems. Officials immediately contacted Microsoft to find the source and vulnerability in their cloud service," wrote Adam Hodge, the acting senior director for press at the White House's National Security Council, in a statement. "We continue to hold the procurement providers of the U.S. Government to a high security threshold. Tech giant Microsoft disclosed on Tuesday evening that it discovered a group of Chinese hackers had broken into some of its customers' email systems to gather intelligence."

User count has no correlation to safety. In fact, the more popular a storage method is, the more likely the baddies and script kiddies are looking at it.