What does sub-chapter S refer to?
A tax option under the Internal Revenue Code of 1954 which permits certain closely held corporations to be taxed in a manner similar to that applicable to partnerships. Under Subchapter S corporate income is taxable directly to shareholders whether or not actually distributed to them. Subchapter S was designed to eliminate the double taxation problem. However, the provisions of Subchapter S are complex and create a number of unique problems not present in the tax treatment of partnerships.
