While your facts are limited, I have the following thoughts:
- You don't indicate the ownership percentage, but it sounds like you own a majority of the stock.
- The IRS has ruled (Revenue Ruling 57-502), when a shareholder-employee is a controlling stockholder, the IRS often asserts that the shareholder cannot deduct the expenses in any event because they relate to corporate business rather than to duties as an employee.
- Not taking a salary should not be an issue if the company is struggling as long as you did not take distributions. The IRS frowns on this. However, I would take the position that the company could not afford a regular salary (assuming that is accurate) and that any distributions were paid out to pay the tax on the pass-through income. This of course assumes the company was making $$ and may not have been based on your facts.
- In the future, either set up a loan for the unreimbursed unpaid expenses (with a note and an interest rate equal to the current applicable federal rate), or call it a capital contribution.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
