2.1.1.1. Entity Classification
Since 1997, the IRS has allowed business entities that are not a “per se” corporation to decide how they wish to be taxed. The so-called Check-the-Box Regulations allow an eligible entity with two or more owners to be classified as either a corporation or a partnership. A single-owner entity can choose to be a corporation or a disregarded entity.
For federal tax purposes, the term corporation is defined as:
• a legal entity organized under a federal or state statute described as “incorporated,” a “corporation,” or “body politic”
• a legal entity organized under a state statute described as a joint-stock company
• an association
• an insurance company
• a state-chartered bank, if FDIC-insured
• an entity that the IRS describes as “taxable