This allows the shareholder-employee to keep a large salary, since these nontaxable fringe benefits include car allowances, house expense, and any other business or personal expense that is not covered under the salary paid.B.If salaries are too high for shareholder-employee's, the IRS will investigate the salary paid to ensure it is not too inflated for the position. Therefore, nontaxable fringe benefits are beneficial to avoid IRS encounters.C.This permits the shareholder-employee to exclude these amounts from personal taxation while the corporation obtains a deduction for the expenditure.