Corporation didn't cease to exist despite administrative dissolution, IRS rules June 09, 2015 Share Subscribe RFP In a private letter ruling (PLR 201522001), the IRS ruled that a corporation that had been filing its U.S. federal income tax returns and otherwise operating as a corporation, failed to file its annual state corporation report and pay its annual state franchise tax in its state of incorporation. As a result, the corporation was administratively dissolved under state law. Nonetheless, the corporation continued to file its federal Form 1120, “U.S. Corporation Income Tax Return,” and otherwise pay all corporate taxes. When the taxpayer corporation realized the dissolution had occurred, it reincorporated in the same state on a subsequent date. The IRS ruled that the taxpayer’s status as a corporation did not terminate in spite of the administrative dissolution. While this result appears equitable at first blush, it raises many collateral issues in connection with situations such as de facto liquidations and state and local tax concerns. Contacts Andy Cordonnier +1 202 521 1502 firstname.lastname@example.org Greg Fairbanks +1 202 521 1503 email@example.com Tax professional standards statement This document supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the subject of this document, we encourage you to contact us or an independent tax professional to discuss the potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this document may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this document is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.