In a similar case, through the Revenue Ruling 74-44 issued in 1974, the IRS imputed the payment of reasonable salaries to an S corporation that paid dividends but no compensation to two shareholders who provided services to the corporation. In another case, the taxpayer was Spicer Accounting Inc., an accounting firm established as an S corporation run by Spicer, a CPA, and his spouse. Spicer had an arrangement with his corporation whereby he donated his services to the corporation in exchange for no compensation, and he withdrew his earnings as distributions. Accordingly, Spicer did not pay employment taxes on the amounts he received. But the Ninth Circuit concluded that distributions paid to Spicer were classified properly as compensation