I know this is an issue for the IRS.  And so with each new S-Corp client I start reading some guidance. Then it always occurs to me that my clients are too small to bother the IRS (All are less than $500K sales).  I usually choose an annual wage for the client of about 1/4/ to 1/3 of annual nontaxable distributions then let it go.

How much time do you spend on this issue with your clients?

(I picked up a new Scorp client a week ago who has never paid herself a wage in 8 years who has never been audited.  Her annual sales are usually about $100 to $150K.)