Southern Ground Family, Inc.: Case Study

Southern Ground Family, Inc. (the “taxpayer”) (FEIN: 47-1976761) timely filed its Alabama ‘S’ Corporation Income Tax Return, Form 20S, for the income tax period ended December 31, 2014. The taxpayer received federal approval to be treated as an S corporation. The taxpayer is the parent company of multiple subsidiaries and acts as a holding company. The taxpayer files an income tax return in the state of Alabama on behalf of its subsidiaries even though the taxpayer does not conduct any business in the state.

The taxpayer is the owner of Home Grown Music, Inc. (“HGM” or the “subsidiary corporation”) (FEIN: 20-1067821). HGM made a federal election to be treated as a Qualified Subchapter S Subsidiary (“QSSS”) effective April 23, 2013. HGM conducts