Syl Corp. does not withhold FICA taxes from its employees' compensation. Syl voluntarily pays the entire FICA tax for its share and the amounts that it could have withheld from the employees. The employees' share of FICA taxes paid by Syl to the IRS is
A. Deductible by Syl as additional compensation that is includible in the employees' taxable income.
B. Not deductible by Syl because it does not meet the deductibility requirement as an ordinary and necessary business expense.
C. A nontaxable gift to each employee, provided that the amount is less than $1,000 annually to each employee.
D. Subject to prescribed penalties imposed on Syl for its failure to withhold required payroll taxes.
Answer: A. Deductible by Syl as additional compensation that is includible in the employees' taxable income.
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