Which type of corporation is not considered a taxpayer?

An S corporation is not considered a taxpayer because it is classified as a pass-through entity. This means that the income, deductions, and credits of the corporation pass through to the shareholders, who then report this information on their individual tax returns. The S corporation itself does not pay federal income tax, which distinguishes it from C corporations that are subject to double taxation—once at the corporate level and again at the shareholder level when dividends are distributed.

In contrast, C corporations are taxed at the corporate level and are responsible for paying taxes on their earnings. Limited liability companies (LLCs) can be treated as either a pass-through entity or a corporation depending on how they elect to be taxed. Partnerships, like S corporations, are also pass-through entities but are distinct in their structure and tax implications. Overall, the S corporation’s unique tax treatment allows its shareholders to avoid the corporate taxation scenario, making it not considered a taxpayer in the conventional sense.