{"ok":true,"canonical_url":"https://dealroom.so/glossary/tax-status","api_url":"https://dealroom.so/api/public/glossary/tax-status","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"tax-status","term":"tax status","group":"People and paperwork","definition":"How the business is structured for tax purposes (e.g., S-Corp, C-Corp, LLC, Sole Proprietor). This affects how the business's income and expenses are reported and taxed, directly impacting your personal tax situation.","what_it_means":"Your personal and business tax status dictates how profits and losses flow through. During due diligence, you'll review historical tax returns to verify reported income and expenses, ensuring consistency with financial statements. Your CPA will advise on the optimal tax structure post-acquisition, often aligning with your personal tax strategy.","url":"https://dealroom.so/glossary/tax-status","official_sources":[],"related":[{"slug":"tax-return","term":"Tax return","url":"https://dealroom.so/glossary/tax-return"},{"slug":"irs-transcripts","term":"IRS transcripts (4506-T)","url":"https://dealroom.so/glossary/irs-transcripts"},{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"sole-proprietor","term":"Sole proprietor","url":"https://dealroom.so/glossary/sole-proprietor"}],"related_questions":[{"question":"What if the business I'm acquiring has pending tax audits or unresolved tax issues?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-has-pending-tax-audits-or-unresolved-tax-issues"},{"question":"Do unfiled tax returns or overdue taxes prevent SBA approval?","url":"https://dealroom.so/sba-7a/questions/do-unfiled-tax-returns-or-overdue-taxes-prevent-sba-approval"},{"question":"What does 'Preferred Lender Program' (PLP) status mean for a bank?","url":"https://dealroom.so/sba-loans/basics/what-does-preferred-lender-program-plp-status-mean-for-a-bank"},{"question":"What if a business applicant has outstanding federal tax liens or delinquencies?","url":"https://dealroom.so/for-lenders/questions/what-if-a-business-applicant-has-outstanding-federal-tax-liens-or-delinquencies"},{"question":"What documentation proves U.S. citizenship or Qualified Alien status for owners?","url":"https://dealroom.so/for-lenders/questions/what-documentation-proves-u-s-citizenship-or-qualified-alien-status-for-owners"},{"question":"Can tax returns of the business be used to support a partner buyout?","url":"https://dealroom.so/sba-7a/questions/can-tax-returns-of-the-business-be-used-to-support-a-partner-buyout"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — tax status","url":"https://dealroom.so/glossary/tax-status","source_type":"DealRoom Data"}}