Hi can someone please help me with this question?

Jumbo, Inc. was formed as an S corporation with 5 shareholders (named A, B, C, D & E), with each owning 20 shares of stock. A,B & C are the officers and directors of Jumbo, Inc., which earned a profit of 200k in 2018. Instead of declaring a dividend and paying out the profits to the shareholders, the company used the funds to purchase new equipment in 2019. In addition, in 2017 D transferred her shares to an LLC owned solely by D. The issue(s) for the shareholders is/are: 1. Tax must be paid by the individual shareholders for the 2018 profit II. No problem, they're making money! III. The IRS could re-characterize the S Corp to a C Corp IV. The IRS coul aracterize the axes owed to the O I and IV O I and III O 11 OI