This seems like a very very small issue to me. Any helpful resources or examples?

Sounds like he’s been reimbursing gym memberships for a couple employees without recognizing wages as a fringe benefit. They’ve also reimbursed some other expenses like medical out-of-pocket. He just realized it should be included in income and is fixing it this year.

I don’t know the numbers, but I’m guessing it’s around $10k per year total across all employees. The individual’s tax impact would be 25-30% of that based on their tax rates and even less on employer payroll tax. Seems minor

Given it’s immaterial imo and not willful, it can’t be that serious. Right?

Anything I can share to help him relax?