The IRS takes a stern view on what is known as assignment of income. There are long-standing legal doctrines that prevent assigning one's income to a third party or another entity, such as an S corporation. Substitution is not allowed even if the ...

An S corp is a corporation that has elected to be treated as a partnership for tax purposes. This means that the company does not pay income tax; instead, income and deductions flow through to the personal income tax return of each owner.