Eligibility, election and termination issues.
Eligibility, Elections and Terminations
The general definition of an S corporation includes restrictions on the type and number of shareholders, as well as the type of corporation that may qualify for the election. If an S corporation violates any Of these limits, its S status is automatically terminated. However, the taxpayer can request an inadvertent termination ruling under Sec. 1362(f) and, subject to IRS approval, retain its S status continuously.
Filing an S election: To qualify as an S corporation, the corporation and all its shareholders on the election date (as well as other affected shareholders) must timely file a valid Form 2553, Election by a Small Business Corporation. This election should be sent by certified mail (return receipt requested), registered mail or a pre-approved private delivery service (e.g., Federal Express, Airborne Express, DHL or UPS). The burden of proof is on the taxpayer. However, in two recent letter rulings, (43) the Service allowed S status even though the IRS had no record of Form 2553 being filed. Taxpayers have continuously lost on this issue in the courts; these rulings point out that the IRS is more lenient in these matters if the issue is raised before audit than in the courts.
Late elections: Last year, the IRS issued Rev. Proc. 2003-43, (44) which grants S corporations a 24-month extension to file Form 2553 without obtaining a letter ruling and, thus, allows them to avoid user and professional fees. Rev. Proc. 2003-43 also applies to late-filing requests for qualified Subchapter S subsidiaries (QSubs), electing small business trusts (ESBTs) and QSSTs.
It appears that the procedure is having the desired effect. Even though the IRS continues to receive numerous late-filing letter ruling requests, (45) the number decreased substantially this year. In all instances, the IRS allowed S status from inception under Sec. 1362(b)(5), as long as the taxpayer filed a valid Form 2553 within 60 days of the ruling. In a number of these situations, (46) the corporate minutes reflected that the company wanted to be an S corporation and filed Form 1120S, U.S. Income Tax Return for an S Corporation, indicating the corporation intended to be an S corporation. However, Form 2553 was not filed prior to the ruling request. In other rulings, (47) a lawyer, accountant, tax preparer or financial consultant failed to complete Form 2553, but the company filed Form 1120S and the shareholders included the income on their returns. The government allowed S status at the company's inception in these cases.
In a recent ruling, (48) a corporation was formed prior to the "check-the-box" regulations. The company tried to make an S election, but was denied because of the uncertainty of the company's entity classification. Under the check-the-box regulations, the corporation would be allowed to make an S election. The company requested and was granted relief under Sec. 1362(b)(5), allowing it to be treated as an S corporation from inception.
In another case, (49) the corporate minutes showed that the owners intended the company to be an S corporation; however, no Form 2553 was filed. The company's accountant filed a Form 1120, instead of an 1120S, for the corporation's first year. The IRS ruled that the corporation was eligible under Sec. 1362(b)(5) and could file an S election within 60 days of the ruling. The election would be valid for the company's first tax year. Presumably, amended returns would need to be filed for the corporation and all of its individual shareholders.
Likewise, in another situation, (50) a taxpayer set up a corporation, intending it to be an S corporation; however, the S election was never made. For five years after the corporation was formed, the taxpayer reported his income as a sole proprietorship. The IRS allowed the corporation relief and allowed S status from inception. Like the previous case, it would appear that amended returns would need to be filed for all open years; however, the IRS did not address this problem, nor explain how the closed years should be reported.
Also, in several instances, (51) the entity was a limited liability company (LLC) or a limited partnership that planned to file Form 8832, Entity Classification Election, to be treated as a corporation, then file Form 2553 to be taxed as an S corporation. Neither election was ever filed. The Service granted these entities relief and allowed S status from inception, as long as both forms were filed within 60 days of the ruling.
In a different situation, (52) an S corporation owned a QSub. The parent distributed its stock in the QSub to its shareholders, thus terminating the QSub election. The shareholders intended the subsidiary to be an S corporation after termination of the QSub election; however, no Form 2553 was filed. The Service determined that there was reasonable cause for failing to make a timely S election and allowed the subsidiary S status. The stock distribution would either be a tax-free spinoff or taxable under Sec. 311(d). The IRS did not rule on whether the distribution was taxable.
Who should sign Form 2553: Under Sec. 1362(a)(2), all shareholders who own stock on the election date must sign Form 2553. If the election is to be retroactive to the beginning of the year, Sec. 1362(b)(2)(B) requires all shareholders who owned stock that year, prior to the election, to also sign. In Rev.Proc. 2004-35,53 the IRS provided automatic relief for late shareholder consents for S elections in community property states. Such relief would be allowed to S corporations whose election is invalid because the company failed to include the signature of a community property spouse deemed a shareholder solely because of state community property law, if both spouses reported income consistent with the S election.
To be granted this relief, the corporation must file a signed statement from each of the spouses consenting to the S election and stating that they have reported all income and loss items consistent with such election on all affected returns. A problem could occur in this type of situation if the spouse is a nonresident alien (NRA), because an NRA is an ineligible shareholder. If the spouse is an NRA, he or she may elect dual-resident status to maintain S status.
If one of the S shareholders is a qualified trust, the beneficiary must sign the election for it to be valid, not the trustee. In two letter rulings, (54) the trustee, not the beneficial, signed the S and QSST elections, making them invalid. The Service ruled that the invalid elections were inadvertent and allowed the corporation to retain its S status and the trusts to be QSSTs, as long as Form 2553 and a QSST election with the proper signatures were filed.
Election of year-end: If an S corporation is required to change from a natural business year to a calendar year due to changes in the business climate or no longer qualifying, Rev. Proc. 2003-79 (55) allows each S shareholder to elect to spread the income ratably over four years. The election applies to short tax years ending between May 10, 2002 and June 1, 2004. The individual shareholder should note on Form 1040, Schedule E that, per Rev. Proc. 2003-79, he or she is electing a four-year spread.
One class of stock: Sec. 1361(b)(1)(D) prohibits an S corporation from having more than one class of stock, defined as equal rights to distributions and liquidations, but not necessarily equal voting rights. In a Sec. 368(a)(1)(E) recapitalization ruling, (56) S shareholders received both voting and nonvoting stock. The only distinction between the two types of stock was the voting rights, as all shares had identical distribution and liquidation rights. As appropriate, the Service ruled that the company would only have one class of stock for Sec. 1361(b)(1)(D) purposes.
A state law partnership can elect to be taxed as a corporation. However, if the partnership has both general and limited partners, the differences in rights and obligations may create a second class of stock. This question is under IRS study and has been added to the no-advance-rulings area. In two situations, (57) an S corporation converted to a state law partnership, but when it learned that the conversion might create a second class of stock, the company converted back to an S corporation. The Service ruled that the temporary conversions did not terminate the initial S election.
In a similar situation, (58) an S corporation converted to a state limited partnership that the shareholders intended to be taxed as a corporation. Following the conversion, a holding company was set up; the shareholder transferred his partnership interest in the partnership to the holding company. The result was a tiered structure with a corporation owning part of the partnership. As in the other rulings, the Service allowed the partnership to retain S status, even though it did not convert back to an S corporation. This ruling provides some insight into how the Service plans to treat state law partnerships that elect to be treated as a corporation.
In another instance, (59) a corporation had only one class of stock, but two different agreements for redemption rights--a buy-sell agreement with younger shareholders and a different agreement with two senior shareholders. The IRS determined that, because buy-sell agreements are not corporate governing provisions, they are disregarded in determining whether stock confers identical distribution and liquidation rights. Thus, the existence of two different shareholder agreements did not violate the second-class-of-stock requirement.
Likewise, in another ruling, (60) shareholders had an agreement with an anti-dilution clause applicable to only two of the shareholders. The Service did not rule whether the clause created a second class of stock. Instead, it ruled that, if the clause did create a second class of stock, the S termination was inadvertent; thus, the company could preserve its S status by deleting the clause. Tax advisers should be wary of such clauses, without receiving an advance ruling, based on how the IRS decided this case.
In another ruling, (61) an S corporation issued preferred stock to both eligible and ineligible shareholders. When the company's tax professional learned of the issuance of the second class of stock, the company redeemed it with common stock (presumably, a nontaxable E reorganization). The ineligible shareholder then transferred its common stock to an eligible shareholder. The IRS concluded that the issuance of the second class of stock and the issuance of stock to an ineligible share holder terminated the S election; however, the termination was inadvertent and the company was allowed to retain S status.
QSub election: An S corporation may own another S corporation only if it files a QSub election for the wholly owned subsidiary. The election should be filed on Form 8869, Qualified Subchapter S Subsidiary Election, by the 15th day of the third month after the election date, to be effective. Many of the past year's rulings (62) involved the late filing of a QSub election. In each case, the Service determined that good cause had been shown for the delay and granted an extension of 60 days from the ruling date to make the election.
In an unusual situation, (63) a corporation planned to be an S corporation, but never filed the election. Its attorney was not aware of the Sec. 1362(b)(5) relief provision. Instead, a second corporation was formed and a timely S election made. The first corporation's interest was transferred to the S corporation, with the first company becoming a wholly owned subsidiary of the S corporation. Unfortunately, the attorney did not advise the taxpayer that a QSub election was needed. The IRS found that the company established reasonable cause for failing to make both the S corporation and the QSub elections and granted it a 60-day extension to file Forms 2553 and 8869. In this situation, the Service found the second corporation's formation was not for tax avoidance reasons. However, there must be a business purpose for the second corporation to exist; otherwise, the IRS could apply the step-transaction doctrine and make the transaction taxable.
Prop. Kegs. Sec. 1.1361-4(a)(6), (64) issued this year, clarifies that QSubs treated as disregarded entities may be treated as separate entities for certain Federal tax liability purposes. Thus, if a QSub was formerly a C corporation, the QSub is the responsible party for past due taxes, audit statute of limitations extensions and transferee liability, etc., for the time it was a stand-alone entity (or part of a consolidated group).
If an S corporation has Subchapter C accumulated earnings and profits (AEP), it must carefully monitor the composition of its gross receipts, for two reasons. First, if it does not eliminate the AEP, and has too much passive investment income (PII) (more than 25% of gross receipts) for three consecutive years, its 8 stares will terminate in year 4. Second, there is a Sec. 1375 tax imposed on excess net passive income, as defined in Sec. 1375(b)(1). S corporations with AEP should consider distributing it, because the dividends Hill be taxed at a 15% maximum rate. If the company pays out all of its AEP, it will not have to worry about excess passive income and termination of S status.
Par for the course, most of the rulings this year dealt with whether rental real estate activities were active or passive in nature for Sec. 1362(d)(3)(C) purposes. Regs. Sec. 1.1362-2(c)(5)(ii)(B) requires either significant services be performed or significant costs be incurred to elevate an activity to nonpassive. In a number of rulings, (65) rentals from industrial buildings, apartment complexes and commercial buildings were all deemed to be active income. The decision was the same whether the property was owned directly or indirectly (66) through a partnership or LLC.
In one instance, the Service had ruled in a previous year that income from partnerships an S corporation owned was not PII. This year, it ruled (67) that changes in the partnerships from limited to general and from partnership to LLC will not affect its earlier ruling that the corporation's rental income was not PII. In a case that did not involve rental income, the IRS also ruled that an S corporation's income from literary and film rights was not PII. (68)
In another situation, (69) an S corporation was a diversified investment and manufacturing company. Along with real estate and equipment leasing, the company had a printing business, and held a professionally managed portfolio of stocks and bonds. Part of the company's investment strategy was to invest in publicly traded limited partnerships that engaged in mining activities. The IRS ruled that the mining income was not PII. It also ruled that the S corporation's distributive share of the gross receipts from the mining operation had to be included in its gross receipts under Secs. 1362(d)(3) and 1375(d) to determine if the company had excess PII. One of the practical issues that arises from this ruling is how the S corporation will know the publicly traded partnership's gross receipts from mining.
The Service had an opportunity to rule on a case in which a company had excess PII. (70) The S corporation had excess passive income and AEP for four years. In the fifth year, the corporation distributed its entire AEP to the shareholder to eliminate the excess passive income tax. The company did not discover until the sixth year that S status had terminated at the beginning of year four. The Service determined that the termination was inadvertent and allowed the company to retain S status continuously.
Sec. 1361(b) restricts who can own shares in an S corporation to U.S. citizens, resident individuals, estates and certain trusts and tax-exempt organizations.
Because an IRA is an ineligible S shareholder, a direct rollover of S stock from a SESOP to an individual participant's IRA would normally disqualify the corporation's S status. Rev. Proc. 2004-14 (71) supersedes Rev. Proc. 2003-23 (72) and allows the S corporation or the SESOP to buy the S stock directly from the employee's IRA, in which case none of the income or loss is allocated to the IRA, and S status will continue unbroken.
Also, in Rev. Rul. 2004-50, (73) the IRS ruled that a Federally recognized Indian tribal government was not an eligible S shareholder. Such a government cannot be an eligible shareholder, because it is not subject to tax as an individual taxpayer under Sec. 1 and does not qualify under Sec. 501(c)(3) because it is a government, not a charitable organization. However, if individual members of said government owned the stock, they would be eligible shareholders, as they are U.S. citizens subject to income tax. (74)
In two instances, (75) an S corporation issued shares to an ineligible shareholder. When the corporation discovered the mistake, steps were taken to remedy the problem. The Service ruled the corporation would be treated as an S corporation as long as the error was corrected within 60 days of the ruling.
In another ruling, (76) an S corporation transferred shares to an LLC, which was an ineligible shareholder. When the mistake was discovered, the shares were redeemed. The Service ruled the termination was inadvertent and the corporation was allowed to retain its S status. However, the LLC was deemed to be a shareholder for the period it owned the S stock and had to report its share of S income on its partnership return and make the appropriate adjustments to stock basis under Sec. 1367. In this case, the LLC members had properly reported their share of the S income. If not, amended returns for the LLC and all of its members would be needed.
In a similar situation, (77) an S corporation issued shares to a single-member LLC. The LLC was treated as a disregarded entity for Federal tax purposes. Later, the sole member of the LLC transferred his interest to a QSST. The IRS ruled that because the LLC is disregarded as an entity separate from its owner, the fact that the LLC owns the S corporation would not terminate the S election. Likewise, because the trust was qualified, the transfer of the LLC to the trust also would not terminate the S election.
In another ruling, (78) a shareholder transferred his S stock to a partnership. Later, the shares were distributed back to the original owner. As with the LLC, the Service ruled the termination was inadvertent. The IRS did not rule on whether the partnership or the individual had to report the S income while the partnership held the stock. Based on other rulings, it appears the partnership would be deemed the shareholder during that time. If so, amended returns might be needed for the individual shareholder, the partnership and all of its partners.
In another case, (79) a shareholder transferred his stock to a C corporation, unaware that it was an ineligible shareholder. When the error was discovered, the stock was transferred retroactively to an eligible shareholder. The Service found that the individual to whom the stock was transferred, not the C corporation, would be treated as the S shareholder from the date the stock was initially transferred and allowed the corporation to retain S status.
In another situation, (80) an S corporation and its QSub wanted to sever ties; the S corporation planned to distribute all the QSub shares to individual shareholders. Immediately thereafter, the QSub would make an S election. The Service ruled that the stock distribution would terminate the QSub election and, if the S corporation distributed the stock immediately, the S corporation's momentary ownership would not create an ineligible shareholder for the QSub.
In another ruling, (81) an IRA acquired S stock. The IRA beneficiary died; the shares in the IRA were transferred to a second IRA. When the problem was discovered, the beneficiary of the second IRA agreed to be treated as the owner of such shares. Because the issuance was not for tax avoidance or retroactive tax planning purposes, the IRS ruled that the S termination was inadvertent. The ruling was contingent, however, on the IRA transferring the stock to its beneficiary within 60 days of the ruling, and the new stockholder filing amended returns for all open years to account for the tax consequences associated with the S stock as if the individual were the owner at the time the IRA owned it. The Service did not rule on whether the distribution of the shares to the beneficiary would be a disqualifying IRA distribution, but presumably, it would not be.
The Advanced Delivery & Chemical Systems Nevada (82) case shows why it is important to have restricted stock transfer agreements or shares identified as S stock, and not to transfer S stock to an ineligible shareholder. In this case, unbeknownst to the S corporation, one of the shareholders transferred his or her shares to a partnership, an ineligible shareholder. Thus, the corporation's S election terminated and the corporation automatically became a C corporation. S corporations are not subject to the accumulated earnings (AE) tax, but C corporations are. Because the S election had been terminated, the company was audited as a C Corporation and assessed a tax on its excess AE earnings. In this case, the Tax Court determined that the company did not have excess AE; thus, no tax was due. However, S corporations and their advisers must be particularly careful if the company has excess AE, not to let the S election terminate inadvertently; otherwise, it could be subject to AE tax. A similar issue could arise with the personal holding company tax.
An S corporation and its tax advisers must constantly monitor trust shareholders' elections, mast agreements and their subsequent modifications, for compliance with S eligibility rules. This year, the IRS ruled in several situations whether a trust would qualify as an S shareholder. In one ruling, (83) eight trusts owned shares in a corporation that wanted to elect S status, but the trusts were ineligible. The trusts were reformed to comply with Sec. 1361(d)(31 by stating that any trust provision not in compliance with such requirements would be void as of the election date. The IRS determined that, as reformed, each of the trusts met the definition of a QSST. Thus, provided a proper QSST election was made, the corporation could elect to be an S corporation. In addition, the trust reformation did not cause them to lose their exempt status for generation-skipping transfer tax purposes.
In another instance, (84) two individuals set up grantor trusts with S stock. After several years it was discovered that the trusts did not qualify as grantor trusts and that an ESBT election had not been made. The Service ruled that the termination of the S election was inadvertent and gave the trustee 60 days to make such an election for the trusts.
In another situation, (85) an eligible trust that owned S stock divided into three separate trusts intended to be eligible shareholders. One of the new masts qualified as a QSST, but the beneficiary failed to make the election. The Service ruled that the transfer to the trust terminated the S election, but determined it was inadvertent and granted a 60-day extension to file.
In an unusual case, (86) a trust owning S stock was divided into four subtrusts. On review, it was determined the subtrusts were not eligible shareholders, because they did not qualify to be treated as wholly owned by their beneficiaries. Once the problem was discovered, the stock was transferred to four new trusts that were eligible shareholders. As with the other situations, the Service ruled that the S election termination was inadvertent.
A testamentary trust set up pursuant to the terms of a will can own S stock for two years. After the two-year period, the trust is an ineligible shareholder, unless a qualified election is made. Treasury issued final regulations on the QSST election for testamentary trusts. (87) Proposed regulations issued in 2001 provided that the trust would continue to qualify as an S shareholder after two years if it made a QSST election. The final regulations clarify that the trust can continue to be an eligible shareholder, by making either a QSST or an ESBT election.
This year, there were several instances in which a testamentary mast held S stock for more than two years. (88) At the end of two years, a QSST election needed to be made for the trust to continue as an eligible shareholder. This election was not made and the mast did not distribute its income to the beneficiaries. The Service found that both the failure to make the QSST election and to distribute the income terminated the S election, but ruled that the termination was inadvertent. This ruling was contingent on all shareholders treating the company as an S corporation and the masts reporting their shares of the S corporation's income on their fiduciary tax returns.
Other Trust Issues
Election requirements: In one instance, (89) a taxpayer transferred stock to a mast that would qualify as a QSST. The beneficiary had a life estate in the trust. The Service ruled that the trust would be an eligible shareholder for the S corporation as long as the QSST election was properly filed.
Another problem encountered by trusts is that for both a QSST and an ESBT, a separate election must be made for the trust to qualify as an eligible S shareholder. Many times, this election is filed incorrectly and an inadvertent termination ruling is needed. This year, there were numerous instances (90) in which a trust was intended to be treated as either a QSST or an ESBT and met all the requirements, but the beneficiary failed to file the election. The IRS determined in each case that there was good cause for the failure to make the election and granted a 60-day extension from the ruling date to make it.
Income distribution and beneficiaries: One requirement for a QSST is that it distribute all of the trust's income annually. In two rulings, (91) an S shareholder was a trust that intended to meet the QSST requirements. However, the trust did not require annual distributions of all trust income. When the corporation realized the problem, the trustee took immediate remedial action. The IRS ruled that the S status termination was inadvertent.
Two other situations (92) dealt with the type of beneficiary an ESBT may have. In the first instance, the trust contained a provision that allowed the trustee to distribute income to multiple charitable beneficiaries. Because this clause could disqualify the trust as an ESBT, the trustee disclaimed the power to make discretionary distributions to any charitable beneficiary except for a named foundation. The Service found that the S election was not ineffective, because the disclaimer occurred before the date Regs. Sec. 1.1361-1(m) became applicable. In the second instance, an ESBT had a contingent charitable beneficiary. The Service ruled that such beneficiary's interest was so remote as to be negligible; thus, the beneficiary was not deemed a trust beneficiary.
Several situations arose this year that addressed when an S election terminates. In a trap for the unwary, Alphonse Mourad (93) owned a 275-unit low-income apartment complex formed as an S corporation. The S corporation filed for Chapter 11 bankruptcy and the trustee sold the apartment complex for $2.08 million. The S corporation was not dissolved, liquidated or converted to a C corporation, so its flowthrough nature remained. The shareholder did not report his share of S income after the corporation filed for bankruptcy. The Tax Court ruled that the bankruptcy filing did not terminate an S corporation's tax status, nor did it create a new entity. Thus, even though the shareholder received no proceeds, he was taxed on his individual return for the flowthrough gain and was liable for the tax thereon.
Most of the issues discussed above dealt with an S election being inadvertently terminated. In Aaron, (94) an S corporation voted to revoke its S election. However, the taxpayer failed to make the revocation, due to an illness; he reported the S income on his return, but planned to amend his return to "correct the situation at a later date." The Tax Court ruled that the taxpayer had to report the S income and pay the tax due; there is no reasonable-cause exception for revocation of an S election. Thus, the S election remains in effect until the revocation is filed.
Under Sec. 1362(g), if an S corporation's election is terminated, the corporation is not eligible to reelect S status for five tax years. S and C short years are treated as two separate tax years. In two instances, (95) an S election terminated when the stock was sold to a C corporation. The former S corporation was then acquired by an individual shareholder who elected S status. Even though the time frame was not five calendar years, the Service allowed the corporation to reelect S status, because five tax years had passed since the termination.
Editor's note: Dr. Karlinsky is a member of the AICPA Tax Division's S Corporation Taxation Technical Resource Panel (TRP). Dr. Burton is the Interim Chair and a member of the AICPA Tax Division's Partnership Taxation TRP.
* Rev. Proc. 2004-35 provided automatic relief for late shareholder elections by community property spouses.
* The ERS ruled in Rev. Proc. 2004-50 that an Indian tribal government could not be an S shareholder.
* Final regulations were issued on QSST elections for testamentary trusts.
For more information about this article, contact Dr. Burton at Haburton@email. uncc.edu or Dr. Karlinsky at firstname.lastname@example.org.
(43) IRS Letter Rulings 200340023 (10/3/03) and 200418030 (4/29/04).
(44) Rev. Proc. 2003-43, IRB 2003-23, 998.
(45) See, e.g., IRS Letter Rulings 200346012 (11/14/03), 200407004 (2/13/04), 200414042 (4/2/04) and 200420027 (5/14/04).
(46) See, e.g., IRS Letter Rulings 200341010 (10/10/03), 200345003 (11/7/03), 200404048 (1/23/04) and 200414017 (4/2/04).
(47) IRS Letter Rulings 200340010 (10/3/03) and 200417021 (4/22/04).
(48) IRS Letter Ruling 200419023 (5/7/04).
(49) IRS Letter Ruling 200351013 (12/19/03).
(50) IRS Letter Ruling 200414042 (4/2/04).
(51) IRS Letter Rulings 200351023 (12/19/03), 200404033 (1/23/04), 200414014 (4/2/04) and 200417024 (4/22/04).
(52) IRS Letter Riding 200423013 (6/4/04).
(53) Rev. Proc. 2004-35, IRB 2004-23.
(54) IRS Letter Rulings 200352014 (12/26/03) and 200407012 (2/13/04).
(55) Rev. Proc. 2003-79, IRB 2003-45, 1036.
(56) IRS Letter Ruling 200407006 (2/13/04).
(57) IRS Letter Ruling 200346016 (11/14/03) and 200347012 (11/21/03).
(58) IRS Letter Ruling 200409012 (2/27/04).
(59) IRS Letter Ruling 200329011 (7/18/03).
(60) IRS Letter Ruling 200329012 (7/18/03).
(61) IRS Letter Ruling 200408021 (2/20/04).
(62) See, e.g., IRS Letter Rulings 200345027 and 200345028 (both dated 11/7/03) and 200418031 (4/29/04).
(63) IRS Letter Ruling 200411029 (3/12/04).
(64) REG-106681-02 (4/1/04).
(65) IRS Letter Rulings 200403083 (1/16/04), 200409011 (2/27/04), 200413009 (3/26/04) and 200422019 (5/28/04).
(66) IRS Letter Rulings 200327004 (7/03/03) and 200414038 (4/2/04).
(67) IRS Letter Ruling 200343012 (10/24/03).
(68) IRS Letter Ruling 200411011 (3/12/04).
(69) IRS Letter Ruling 200408017 (2/20/04).
(70) IRS Letter Ruling 200402021 (1/9/04).
(71) Rev. Proc. 2004-14, IRB 2004-7, 489.
(72) Rev. Proc. 2003-23, IRB 2003 11, 599.
(73) Rev. Rul. 2004-50, IRB 2004-22, 977.
(74) See John W. Marsh, TC Memo 2000-11.
(75) IRS Letter Rulings 200344005 (10/31/03) and 200403081 (1/16/04).
(76) IRS Letter Ruling 200341009 (10/10/03).
(77) IRS Letter Ruling 200339026 (9/26/03).
(78) IRS Letter Ruling 200408011 (2/20/04).
(79) IRS Letter Ruling 200409023 (2/27/04).
(80) IRS Letter Ruling 200411036 (3/12/04).
(81) IRS Letter Ruling 200406016 (2/26/04).
(82) Advanced Delivery & Chemical Systems Nevada, Inc., TC Memo 2003-250.
(83) IRS Letter Ruling 200403031 (1/16/04).
(84) IRS Letter Ruling 200348009 (11/28/03).
(85) IRS Letter Ruling 200347003 (11/21/03).
(86) IRS Letter Ruling 200344013 (10/31/03).
(87) TD 9078 (7/17/03).
(88) IRS Letter Rulings 200343024 (10/24/03) and 200344014 (10/31/03).
(89) IRS Letter Ruling 200404037 (1/23/04).
(90) See, e.g., IRS Letter Rulings 200350011 (12/12/03), 200407012 (2/13/04), 200422012 (5/28/04) and 200423017 (6/4/04).
(91) IRS Letter Rulings 200343003 and 200343004 (both dated 10/24/03).
(92) IRS Letter Rulings 200401011 (1/2/04) and 200417014 (4/22/04).
(93) Alphonse Mourad, 121 TC 1 (2003).
(94) Phillip Aaron, TC Memo 2004-65.
(95) IRS Letter Ruling 20411026 and 200411027 (both dated 3/12/04).
Stewart S. Karlinsky, Ph.D., CPA Graduate Tax Director San Jose State University San Jose, CA
Hughlene Burton, Ph.D., CPA Associate Professor and Chair, Department of Accounting University of North Carolina-Charlotte Charlotte, NC
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|Title Annotation:||Current Developments in S Corporations, part|
|Author:||Burton, Hughlene A.|
|Publication:||The Tax Adviser|
|Date:||Nov 1, 2004|
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