The move by the Department of the Treasury in late 1996,1 effective January 1, 1997,2 to allow the choice of entity to be governed by a check-the-box system was greeted enthusiastically by most tax practitioners, many of whom had labored for years under the long-standing procedure that an unincorporated association would not be taxed as a corporation unless it had more corporate than non-corporate characteristics.3 Under the check-the-box system, a taxpayer could treat domestic unincorporated as partnerships or as associations (which includes corporations) on an elective basis.4 If no election is made, the default status is as a partnership (if the entity has two or more members) or as a disregarded entity separate from its owner if it has a single owner.5



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