Raquel is an employee of Jones Company and owns a 30 percent interest in the company. Her salary is $44,000. She also receives a $10,000 cash distribution from Jones. During the current year, Jones's operating income is $130,000. Identify the tax issue posed by the facts presented, and determine the possible tax consequences of each issue that you identify.

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Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.