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A zero salary is a "red flag" to the IRS because it has established rules and regulations requiring owners to take a reasonable compensation. The IRS does not want someone to avoid paying taxes. The IRS's basic argument is that no one works for free and therefore the IRS requires someone to pay themselves.
While a person may have a legitimate reason for not taking a salary such as to grow their business, it will likely raise a red flag and therefore put the tax payer in a position to defend his/her position and tax returns against the IRS which is can be expensive, stressful and time consuming.
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