The Limited Liability Company and the Search for a Bright Line Between Corporations and Partnerships

Abstract:     
Despite the potential loss in tax revenue, the Internal Revenue Service (IRS) is making it easier and easier to avoid corporate taxes. Witness the advent of limited liability companies and the proposed check-the-box regulations. This article takes a look at the real distinctions between -- and policy supporting -- pass-through and entity level taxation and draws the conclusion that entity level taxation will probably become limited to publicly traded entities only.

JEL Classifications: G38, K22, K34

Accepted Paper Series