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Certain Entities No Longer Disregarded for Purposes of Employment and Certain Excise Taxes

August 28, 2007

By Cristiane Daly

The Internal Revenue Service has issued final regulations regarding the payment of employment taxes and certain excise taxes by entities that would be otherwise disregarded as separate from their owner under Treasury Regulations §§ 1.1361-4(a)(7) and 301.7701-2(c)(2). The regulations affect the owners of subchapter S subsidiaries or disregarded subsidiaries that have employees or otherwise incur excises taxes that are currently paid by the parent entity.

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