Cabintaxi Corporation, Formerly Known as Automated Transit, Incorporated, and Robert Edler, "Tax Matters Person," v. Commissioner of Internal Revenue

POSNER, Chief Judge.

Subchapter S of the Internal Revenue Code entitles certain corporations to elect to be taxed almost (though not quite: see 26 U.S.C. § 1371(a)(1), and compare 26 U.S.C. § 731 with 26 U.S.C. § 311(b)) as if they were partnerships. The Subehapter S corporation’s profits and losses flow through to the shareholders and are reported on their individual income tax returns, 26 U.S.C. § 1366, thus avoiding double taxation of corporate earnings. The election, however, requires the consent of all persons who are shareholders on the date of the election, 26 U.S.C. § 1362(a)(2), which…