Well, no, there is such a thing as distributions from an S Corp, otherwise IRS wouldn't use that word on the return three times (Schedule K, lines 16d and 17c; and Schedule M-2, line 7). But an S Corp can have distributions, with no profit; and a profit, with no distributions.  Even if there are no distributions, the shareholders must pay tax on the profit, so each case is different based on facts and circumstances.  I wouldn't have a problem preparing a return for an S Corp owner/employee with a K-1 showing $50K of ordinary business income, if those funds were kept in the business to pay off debt or buy more assets.