This is not how I stated it: "but I don't understand why it is a payroll tax evasion as schedule C report both employer and employee payroll tax liability."

This is the copied text: "And the other issue is to understand that the IRS will look at any funds taken from the S Corp (you would call it Draw from the Sched C business), which is Distribution in the S Corp and if not taking a reasonable wage through payroll, and they recharacterize it as Payroll, because an S Corp is required to have payroll for the people it hired to do its business."

The "why" is because the IRS states it as such.

Just search the web for:

Reasonable Compensation S Corp