@qbteachmt In other words, there is no "adjusted rate for tax on the Schedule C"

Let’s say a Schedule C filer has a net profit of $107,650. But he (incorrectly) paid himself a $100,000 salary. He deducted that, and then deducted the $7,650 FICA tax that he also paid.

Bottom line on Schedule C: Zero. Therefore, income tax effect and SE tax effect on Form 1040: zero. (Also, no QBI deduction.)

Had it been done correctly, his Schedule C profit of $107,650 would show up on Schedule SE, but his SE income would be reduced to $99,415. His SE tax is $15,310. But he didn’t have to pay that $7,650. So the difference is $7,660 and it costs him only $10 more.

If he does this for the next 20 years, it might make enough difference in his Social Security earnings record (which will show $99,415 annual earnings, not $100,000) to make $1 a month difference in benefits.

But he has shot himself in the foot, if he missed out on the QBI deduction.

Put yourself in the place of an IRS auditor.  Do you:

a)  Make a referral to CID?

or

b)  Move on to the next issue.