IRS Snubs Relief Requests in S Corporation Revocation Rules (2)

Sept. 15, 2020, 3:13 PM; Updated: Sept. 15, 2020, 9:04 PM

The banking industry didn’t get the tax relief its representatives wanted in final IRS rules for former S corporations that made the switch to C corporation status following the 2017 tax law’s enactment.

The 2017 law made C corporation status more attractive when it lowered the corporate tax rate to 21% from 35%. S corporations are pass-through entities—which are taxed at the individual owner level, with marginal rates as high as 37%—while a C corporation, subject to the 21% rate, is taxed separately from its owners.

The final regulations (TD 9914), released Tuesday, address Section 1371(f)...

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