Enrolled Agent Reveals S Corporation Dangers
Granite City, IL, USA - The tax attributes of S Corporations are very attractive to entrepreneurs, but few truly understand the rules and structure of one of the most complicated tax entities in the United States. Enrolled Agent Tommy Brown recently discussed some of the potential pitfalls of S Corporations, highlighting common failures of “S Corp” owners and shareholders.
Brown said the most common failure is the failure to elect S Corporation status by the 15th of the third month of the company. Although many realize that S Corporations must be registered with the state were they are located, they may not know that the election must then be submitted to the Internal Revenue Service in a timely fashion. This mistake is often discovered by the company’s tax preparer the following tax year.
Another common failure is the failure to keep minutes. S Corporation officers must meet at least once a year, and minutes of those meetings must be kept. This documentation must include bank account information, S Corporation election, loans to and from shareholders, compensations, distributions, and any other material matter.
Taxpayers who want to learn about more potential S issues may sign up for Tommy Brown’s free tax tips newsletter at http://tommybrown-ea.com.
Tommy Brown, Enrolled Agent, has successfully resolved tax issues for thousands of clients nationwide. If you owe past due taxes to the IRS and need to arrange a tax settlement or IRS debt relief, contact him at http://tommybrown-ea.com.
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