Imagine that the owner of the dry cleaning service (by the way, it is called “We launder it all”) engaged your payroll company to help him with payroll. You are now a successful payroll service provider and “We launder it all” is your fist client. Aren’t you glad?
Further, imagine, that the owner of “We launder it all” is asking you to process his first pay. Yes, he wants his first paycheck, and he wants it now.
Prepare a list of items that the owner needs to provide before his first paycheck can be processed.
Also, advise the owner on the reasonableness of his compensation, taking into account the guidelines of “Reasonable Compensation Job Aid for IRS Valuation Professionals if “We launder it all” was a subchapter C corporation. If the business was a subchapter S corporation, would your advice be different? Why or why not?