Limited Liability Companies (LLCs) emerged as the preferred form of doing business many years ago. In addition to state law advantages and liability protection, LLCs are flexible in their tax status for federal income tax purposes. When businesses that are organized as LLCs elect to be taxed as S corporations they follow a simple procedure that is based on eligibility criteria. However, an oft-overlooked foot fault may leave many LLCs surprised to find that they were not eligible to be S corporations. This would have disastrous tax consequences and a great number of unsuspecting LLCs may be in this predicament without knowing it.