I've owned an S-Corp for 15 years, I think I would know how one works.<p>Do you or have you ever ran an S-Corp? You seem to be providing a lot of opinions. Just wondering what your credentials were.<p>Owners of S-Corps pay off a W-2 <i>for that portion of their income paid as payroll</i>. The rest of it comes across on a different schedule (1120-S). I've been doing this for years. I think I know.<p>All business arrangements have the option of how to handle excess income. Some entities may pay every penny of it to founders as W-2 income. Some may choose to pay a bit and hold the rest as savings. Some may create a bonus situation, LLCs have direct disbursements, etc.<p>For sole proprietors and S-Corp owners, excess income (income not spent in payroll or other "legit" expenses) "flows down" to the owner, which has to pay the rest as income tax.<p>It's not specific to S-Corps at all. The "scam", as you put it, could be as simple as the decision to hang on to some cash in the corporate account at the end of the year instead of paying payroll, or it could be the decision to use a bonus-as-disbursement system. Either one would be bypassing FICA.<p>Or you could decide you'd rather not take a payroll for yourself. Perhaps your income is spotty, you can't afford to pay yourself minimum wage, or perhaps you can't deal with the overhead required for payrolls. Whatever. It's your decision.<p>I'm going to bail out now -- I've played the infinite argument game with you before. I'm happy to admit fault if I don't understand this -- but I'd be really, really, really surprised if that was the case.<p>And congrats on ducking the question I asked about solutions and instead turning the conversation to my qualifications. Makes it much less a conversation and much more a debating game.