$4.$ P$,$ an S corporation, distributed its entire $$500,000$ net business income to John, its sole shareholder and president. John then reported this $$500,000$ as nonpassive income from an S corporation on his Form $1040.$

$$ John performs substantial services for P$.$ He spent at least $35$ hours per week providing consulting services on behalf of P

$$ John is the only person working for P$.$ All of P$\text{'}$s income was generated from the consulting services provided by John.

$$ P did not make regular payments to John; rather, John withdrew money from P$\text{'}$s bank account at his discretion.

Requirements: After conducting appropriate research, answer the following questions and include citations from relevant tax authorities:

a$)$ Is an S corporation required to pay income tax?

b$)$ Based on the information provided, is John considered an employee of the S corporation?

c$)$ What are the tax differences between income distributions and salary payments in an S corporation?

d$)$ P treated all $$500,000$ of net income as a distribution to its sole shareholder, John. Do you agree that the entire $$500,000$ should be treated as a distribution? What motivated P to classify the entire $$500,000$ as a distribution?

e$)$ Cite at least one tax court case similar to this situation.