Legal Question in Tax Law in Massachusetts

Re: Private Corporation

While it may be illegal, your claim may be difficult to prove and more importantly why do you care.

If he is paying his son, under the new law there is only marginal benefit tax wise unless his son is over 18 yrs old. Moreover, his son can work hours at any time for his father and need not be present at the business unless he punches a clock and chances are they will be able to prove he worked the hours.

If the business is going bankrupt the creditors might have a claim. If he is paying payroll taxes chances are no one is going to do much about it. You can file a complaint with the State Employment Department.

Again, how does this effect you. Your employer is not getting any great tax benefit and his son is paying taxes. He could salary his son even as a part-time employee if he wants or he could pay him to sit in his office and do nothing, if the father finds it of value. If it is a matter between shareholders that is something different. Then you as a shareholder may have a claim for wasting of assets.