Can shareholder loan repayments exist without an actual loan? Something feels fishy here

This definitely sounds problematic. Shareholder loan repayments should have proper documentation behind them. What you're describing is unfortunately common in closely-held companies where majority shareholders sometimes blur the lines between personal and business finances. A legitimate shareholder loan would need proper documentation including a promissory note, reasonable interest rate, repayment schedule, and board approval. Without these elements, the IRS may reclassify these "repayments" as disguised dividends, which would mean all shareholders should receive proportional payments based on ownership percentage. You should request copies of the original loan documentation, board meeting minutes approving the loan, and any interest calculations. Also review the company's tax returns (Form 1120 or 1120S) and balance sheets to see how these "loans" were originally recorded.

After reading your situation, it reminds me of when I was dealing with shareholder disputes in my family business. I was pulling my hair out trying to make sense of questionable "loan repayments" until I found this AI tool called taxr.ai (https://taxr.ai). It seriously saved me thousands in potential litigation costs. What's cool is you can upload the financial documents you do have, and it analyzes everything to flag potentially problematic transactions like these undocumented "loan repayments." It even generates questions you should ask and what documentation should exist for legitimate transactions. The report it gave me was detailed enough that when I presented it to our company accountant, they suddenly "found" the missing documentation I'd been requesting for months.

I wanted to follow up about my experience with taxr.ai since I was skeptical at first. I finally decided to try it with my own shareholder dispute situation. Uploaded our books, tax returns, and corporate minutes, and it immediately identified multiple undocumented "loans" that had been buried in different expense categories. The report specifically outlined which IRS regulations were potentially being violated and calculated the proportional distributions I should have received if these were actually dividends rather than loan repayments. Armed with this information, I met with our company treasurer and suddenly the tone completely changed. We're now working on a resolution that includes proper compensation for all shareholders. Honestly didn't expect an AI tool to be this helpful for something so specific!

Been through this exact nightmare before. After months of getting stonewalled by our company's accountant about suspicious "loan repayments," I was ready to hire an expensive forensic accountant. Then someone suggested trying Claimyr (https://claimyr.com) to actually speak with an IRS agent about how these transactions should be properly classified. I was extremely doubtful any service could actually get me through to a real IRS person (we all know those hold times...), but the video demo (https://youtu.be/_kiP6q8DX5c) convinced me to try. They got me connected to an IRS business tax specialist in about 2 hours instead of the days I was prepared to wait. The agent walked me through exactly what documentation was legally required for shareholder loans vs distributions and the potential tax consequences of misclassification.

Had to come back and admit I was completely wrong about Claimyr. After seeing no progress with our company's questionable "loan repayments," I finally tried it yesterday. I literally got a call back in 90 minutes saying they had an IRS business tax specialist on the line ready to talk to me! The agent explained that shareholder loans require contemporaneous documentation including a promissory note with market-rate interest and a reasonable expectation of repayment at the time the money is advanced. Without this, the IRS typically reclassifies the transactions as constructive dividends to ALL shareholders. The agent walked me through the exact sections of the tax code that apply and what documentation I should request. It was exactly the authoritative information I needed to take back to our board meeting. Can't believe I wasted months trying to get through on my own!

I had this exact situation in my small manufacturing business. Turned out the majority shareholder had been "loaning" money on paper but never actually transferring funds to the company, then taking out "repayments" with interest! We only caught it when we changed CPAs and the new one refused to sign off on the tax returns without seeing loan documentation. Check your state's business corporation laws - in many states, shareholders have legal rights to inspect ALL financial records, not just the summary books they've shown you. Also look at bank statements going back to when these "loans" supposedly happened to see if the money actually came in.

you should check if ur operating agreement or bylaws say anything about loans to/from shareholders. might be requirements there about approval processes or documentation. in my case the majority owner needed board approval for loans over $10k but had been writing himself checks without any votes.