Tax Analysts provides news, analysis, and commentary on tax-related topics, including the choice of entity and entity characterization. 

The choice of business entity form involves many factors – tax considerations are one of those factors. The tax consequences between sole proprietor, partnership, corporation, or limited liability company status are considerable. Choice of entity form was simplified by the “check-the-box” rules, which allow choice of entity classification by filing IRS Form 8832, "Entity Classification Election." Generally, if an election is not filed, an entity with more than one owner that is not classified as a corporation is treated as a partnership for federal tax purposes, while an entity with one owner is treated as a disregarded entity. (Reg. section 301.7701-3) Special rules apply to foreign eligible entities.

Business entity choice is a part of the arguments against corporate inversions ("Corporate Inversions: A Symptom of Larger Tax System Problems") and restrictions on foreign business entity election were suggested by President Obama ("The President's Framework for Business Tax Reform") as a possible revenue raiser to offset lowering corporate tax rates; however, those suggestions have not been adopted.

Tax Analysts consistently and promptly publishes all relevant developments regarding choice of entity and entity characterization, from letter rulings allowing extensions of time to make an entity election, to a consideration of the role of entity taxation in tax reform efforts ("Reforming Entity Taxation: A Role for Subchapter S?").

Tax Notes Federal and Tax Notes Today Federal subscribers have free access to James M. Peaslee and David Z. Nirenberg, Federal Income Taxation of Securitization Transactions and Related Topics (Fifth Edition). Chapter 4 discusses the tax classification of non-REMIC entities, including the following special topics: who is an equity owner; when does an entity exist; series companies or cells companies; when disregarded entities are not disregarded; the classification of business and investment trusts; taxable mortgage pools (TMPs); and the definition of a financial business, which is important in applying the rules for publicly traded partnerships (PTPs).