If you paid 100k in salaries and earned 100k in revenue, then you broke even, and no actual profit was made. Under the rules being discussed here, however, the

If you paid 100k in salaries and earned 100k in revenue, then you broke even, and no actual profit was made. Under the rules being discussed here, however, the 100k you spent in salaries has to be amortized over five years, meaning that even though you actually spent 100k this year, only 20k is deductible from this year's taxes. The IRS then taxes you on the 80k of "profit" you made, which doesn't actually exist, so you don't have the funds to pay the taxes, and your business becomes insolvent. This is absolutely about taxes being charged against non-existent profit.