I don't agree with this at all. As an S-corp, the driver must pay himself a fair and legal salary for his work, including paying FICA and medicare withholding and the company has to match it. If he does not take a salary and only takes the profit from the company (income tax but no SE tax), then he (1) never builds up retirement or disability credits in the social security system, and (2) is committing tax fraud that can send him to jail. The S-corp has way more paperwork for reporting salaries and must pay withholding and employment taxed quarterly on form 941 if the amount is more than $1000 (and if the corporation doesn't owe more than $1000 of tax quarterly he would be earning so little that he would be better off on welfare). The S-corp also has to follow all kinds of rules for employees that a sole prop doesn't (worker's comp, unemployment insurance, minimum wage, etc.) Not a step to be taken lightly or by beginners.
