Tax Analysts provides news, analysis, and commentary on tax-related topics, including the latest developments affecting treatment of Subchapter S corporations.
Small business corporations that elect treatment under Subchapter S of the Internal Revenue code (section 1361, et seq.) are treated as flow-through entities regarding income and loss. In order to elect “S corporation” treatment, the small business corporation must be a domestic corporation, may not have partnerships or corporations as shareholders, and may have only one class of stock. Shareholders must be individuals who are United States citizens or residents, estates, certain eligible trusts, or certain tax-exempt organizations.
In order to elect treatment, the S corp must file Form 2553 with the IRS. Correcting either a late or flawed election is discussed in Rev. Proc. 2013-30, which affects taxpayers who elect to make late S corporation elections, electing small business trust elections, qualified subchapter S trust elections, qualified subchapter S subsidiary elections, and late corporate classification elections that the taxpayer intended to take effect on the same date that the taxpayer intended that an S corporation election for the entity should take effect.
Tax Analysts consistently and promptly reports all relevant developments regarding taxation of S corporations, whether in the form of court opinions (e.g. Larry Williams et ux. v. Commissioner) or news stories – recent coverage has included IRS comments on regulations ("ABA Meeting: Officials Explain Lack of Circular Flow Example in Back-to-Back Loan Regs") Joint Economic Committee testimony (Small Business Interests Advocate Passthrough Form, Integration") – and provides analysis of these developments (e.g., "Current Developments: C and S Corporations and Partnerships").
