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@mlcpa wrote:

Dear TaxGuyBill,

     The tax treatment of fringe benefit paid to owner-employees of an “S Corp” is different form the tax treatment for other employees.

     26 U.S. Code Section 1372(a) provides that, for purposes of applying the income tax provisions of the Code relating to employee fringe benefits, an S corporation shall be treated as a partnership, and any 2-percent shareholder of the S corporation shall be treated as a partner of such partnership. In short, more-than-two-percent shareholders are treated like partners in a partnership.

Interesting feedbacks but they do not address the point I'm asking. For your convenience you can check https://www.law.cornell.edu/uscode/text/26/1372 and then let me know.

If you still understand that feedbacks are correct, I'm going to close this discussion.

To All, thank you for your time and consideration.

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Yes.  That is what everybody is saying.   Fringe benefits are tax-free to most employees, but are taxable to the shareholder employees.

Fringe benefits given to a Partner are Guaranteed Payments, subject to income tax and sometimes Social Security tax, and Medicare Tax.

As you keep pointing out, the same rules apply to the shareholder-employee of the corporation.  They are subject to income tax, and sometimes Social Security tax, and Medicare tax.  In other words, they are wages on the W-2.  That is what everybody keeps telling you, and you keep citing the same thing that just proves what everybody else is saying.