If an S Corporation Inadvertently Terminates Its Election, the IRS

question 33

Multiple Choice

If an S corporation inadvertently terminates its election, the IRS

• A)may permit the corporation to report as an S corporation even for the period that includes the termination date.
• B)will not permit the corporation to restore its S election until the completion of a five-year waiting period.
• C)will permit restoration of the S election only if the event causing the termination was not within the control of the corporation.
• D)will permit restoration of the S election if a majority of the shareholders consent to the reinstatement.

---

Definitions:

Low Performers

Employees who consistently fail to meet the established performance standards and expectations of their position.

High Performers

Individuals who consistently exceed the standard expectations and objectives set by their organization through their work performance.

Discrimination

Unfair or prejudicial treatment of individuals based on characteristics such as race, gender, age, or sexual orientation.

Earnings-At-Risk Pay Plan

A compensation plan in which a portion of an employee's earnings is conditional, based on meeting certain performance criteria.