If you're the sole owner of a corporation and also an employee, you can move money from the corporation to your own pocket by either paying yourself a salary or paying a dividend out of corporate profits.
At least prior to the recent corporate tax rate cut, the tax you'd pay on the salary would typically be less than the sum of corporate income tax and tax on the dividend, so people would pay themselves unreasonably large salaries to save on taxes, and the IRS would object to this.
At least prior to the recent corporate tax rate cut, the tax you'd pay on the salary would typically be less than the sum of corporate income tax and tax on the dividend, so people would pay themselves unreasonably large salaries to save on taxes, and the IRS would object to this.
Here's an article that goes into more detail:
https://www.forbes.com/sites/anthonynitti/2016/05/13/reasona...