Restate w2s for officer's compensation?

[tacks]

I have an S Corporation client who did not pay any compensation to their officers. They might show approximately 49,000 in gross income between two shareholders. I believe that much of the reason that they're going to show that much income is because they kept awful records -- (a low-income mom and pop tried to start a corporation without an accountant -- i regret taking the job)

There were NO shareholder distributions. (they did take $$$ out -- i would classify as shareholder loan)

Would if be worth it, in this situation, to restate W2s in order to show compensation of Officers?

(probably not worth it 10 years ago but now it sounds like it might be worth doing. Sounds like they're looking at this more closely)

EDIT when restating w2s -- w2c -- do all w2s need be restated? Or maybe just the ones needing correction and a new w3? Anyone know?

thanks

[Bees Knees]

If there were no distributions, I would not do payroll after the fact...not for $49,000. I would, however, tell the client they HAVE to do payroll starting this year, or I don't do their tax return anymore.

I would also then take the opportunity to tell them why an LLC is so much better than an S corp...since an LLC does not have to mess with payroll.