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Posts tagged employment taxes.

CheckboxMore than 25 years ago, effective January 1, 1997, Treasury issued what have been called the “Check-the-Box” regulations (the “Regulations”).1  The Regulations ended decades of battles between taxpayers and the IRS over entity classification.  Further, the Regulations simplified entity classification and brought much needed certainty to most entity classification decisions.

Under the Regulations, a business entity with more than one owner is either classified for federal tax purposes as a corporation or a partnership.2  Likewise, a business entity with only one owner is either classified as a corporation or is disregarded for federal income tax purposes as being separate and apart from its owner.3 

If a business entity is disregarded, its activities are generally treated for federal tax purposes as the activities of its owner.  There are five notable exceptions to that rule. 

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Larry J. Brant


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