S Corporation Issues
RSS Issue FeedBACKGROUND
S corporations are treated like partnerships for federal income tax purposes while providing the corporate feature of limited liability protection to their shareholders. S corporation shareholders are thus subject to federal income tax on their share of corporate earnings only once (at the shareholder level), while being limited in liability to their amounts at-risk.
Because of the advantages presented by the flow-through tax treatment and limited liability feature of S corporations, more than 60% of all corporations are S corporations. The vast majority of S corporations are small businesses which are responsible for most new jobs created each year.
The tax rules that govern S corporations have grown increasingly complex and cumbersome, impeding the growth of small businesses and burdening them with unnecessary administrative complexity.
CHAMBER POSITION
The U.S. Chamber successfully fought for enactment of several S corporation reform and simplification provisions in the American Jobs and Creation Act of 2004 (Public Law 108-357). The Chamber will continue to fight for substantial reform of the tax rules applicable to S corporations so that these entities can succeed in today’s global economy.
LINKS