Maybe its because I don't come from an accounting background, but I don't "cook the books" by creating non-existent loans to make things look better.

First, explain the requirement for "compensation" and inform your client that late penalties and interest apply to any late payroll forms if he took any taxable "compensation" before July.

Then for each time your client withdrew money from the corporation for his personal use, ASK him what it was for.  Ask him how much of that amount was (a) compensation for the work he performed for the corporation, (b) taking an owner's benefit/payment from the corporation's profit for non-work as an owner (which is a distribution), or (c) a loan to himself.

Then file accordingly.