Sean Moon is president, secretary, treasurer, sole director, and sole shareholder of Streetz, an S corporation real estate company. He manages all aspects of the company's operations, and he is the only person working at the company that holds a real estate broker's license. Sean works 22-hour days and takes few days off. During 2014 and 2015, Streetz's gross receipts and net income figures were reported as follows.

Year Gross Receipts Net Income
2014 $376,453 $122,605
2015 405,244 161,660
2016 518,189 231,454

Sean and his wife, Kim, filed joint returns, but they did not report any wages or salaries on line 7 of their returns. During 2016, Moon transferred $240,000 from the S corporation to his personal account. 3. You are an expert witness for the IRS. Using a memo form, Identify the items you would present to the U. S. Tax Court with respect to the amount of Moon's compensation that is subject to employment taxes and any other taxes due for the year 2016 (especially the Medicare net investment income tax). Hint: This is a reasonable compensation issue.