Be advised that S corps are on the IRS top tax issues list...........due to taxpayers assuming they do not have to pay social security taxes on the withdrawals.

If labor is being performed.......and distributions are taken as distributions.........IRS has indicated they are stepping up the enforcement on S corps, for purpose of collecting social security and medicare tax on the distributions.

The salvation is to PROVE the amount of the distributions that are related to the non-labor portion of the earnings, ie the amount of earnings stemming from the use of capital, as compared to labor efforts.

That game was played back in the 70's when the high tax rate was being assessed on earned income..........so everyone was trying to prove capital investment high, labor low, to avoid that high tax...............so IRS is already skilled on thwarting that approach.

Make sure significant salaries are being paid.........the only cost is social security tax.........less than 15%...............and one can limit the hit to the amount desired, as compared to having the amount set by the IRS under stress circumstances which include being hit for penalties and interest.