Agreed ... if this was not handled thru the payroll system then a dividend should have been issued to the owner (which FYI is not deductible on the C-Corp return) OR this could have been handled as a loan from shareholder and a repayment of the loan (with interest). You REALLY need to get educated on how a C-Corp works and follow the rules. If you are ever audited you will be pinned to the wall.
