Prompt Discussion Starter: Tax treatment under the Internal Revenue Code is often a primary consideration in choosing a form of organization. Business organizations are taxed either as partnerships or as corporations. To be "taxed as a partnership means that the entity itself pays no income tax, only the owners of the organization pay tax on its earnings. C Corporations, on the other hand, pay federal income tax on their earnings and then shareholders also pay tax on any dividends. To be taxed as a corporation, then, is to be subject to double-taxation under the Internal Revenue Code Question: To say that an organization is "taxed as a partnership" or "not a taxable entity" is simply a euphemism for saying that it is not taxed at all. Some commentators argue that organizations receive valuable privileges, such as limited liabilityand should, in return, pay taxes. Do you agree? PLEASE I DON'T WANT THIS QUESTION BELOW I WANT A DIFFERENT IF YOU ARE AVAILABLE, THIS IS MY SECOND POST. THANKS. JUST SHORT QUESTION No I do not agree. To me, taxing a partnership organization would be, as the article suggests, double taxation. While its true that the organization does get certain benefits (such as limited liability), its purpose is not to somehow enrich the organization or its owners/founders. It to encourage entrepreneurship, company establishment and job creation. A limited liability shields the founders from unlimited harm in case the endeavor fails. So its purpose is entirely different and in my opinion, bears no relation with taxation. Even if talk purely about benefits that the organization enjoys, how do we not look at the other side of the coin, which is the benefits it provides to the society and economy. It creates jobs, increases income and expenditure and contributes in increasing societal surplus. That in itself ought to cover the case for limited liability. In any case, it will be unwise to completely disengage, as far as earnings are concerned, a firm and its owners. When a firm earns, so do the owners. When a firm loses, so do the owners. Similarly, when a firm pays taxes, so do the owners. They are joined at the hip as far as profits and losses are concerned. So taxing them separately, is nothing but double taxation. So, in my opinion, I disagree with the sentiment that organizations should pay taxes separately