Instructions For Form 2553 - Election By A Small Business Corporation

Continuation sheet or separate consent statement. If

Item E. Effective Date of Election

you need a continuation sheet or use a separate consent

statement, attach it to Form 2553. It must contain the name,

Form 2553 generally must be filed no later than 2

address, and EIN of the corporation and the information

TIP

months and 15 days after the date entered for item

requested in columns J through N of Part I.

E. For details and exceptions, see When To Make

the Election on page 1.

Column L

A corporation (or entity eligible to elect to be treated as a

Enter the number of shares of stock each shareholder owns

corporation) making the election effective for its first tax year

on the date the election is filed and the date(s) the stock

in existence should enter the earliest of the following dates:

was acquired. Enter -0- for any former shareholders listed in

(a) the date the corporation (entity) first had shareholders

column J. An entity without stock, such as a limited liability

(owners), (b) the date the corporation (entity) first had

company (LLC), should enter the percentage of ownership

assets, or (c) the date the corporation (entity) began doing

and date(s) acquired.

business. This same date will be entered for item H.

Column M

A corporation (entity) not making the election for its first

tax year in existence that is keeping its current tax year

Enter the social security number of each individual listed in

should enter the beginning date of the first tax year for which

column J. Enter the EIN of each estate, qualified trust, or

it wants the election to be effective.

exempt organization.

A corporation (entity) not making the election for its first

Column N

tax year in existence that is changing its tax year and wants

Enter the month and day that each shareholder’s tax year

to be an S corporation for the short tax year needed to

ends. If a shareholder is changing his or her tax year, enter

switch tax years should enter the beginning date of the short

the tax year the shareholder is changing to, and attach an

tax year. If the corporation (entity) does not want to be an S

explanation indicating the present tax year and the basis for

corporation for this short tax year, it should enter the

the change (for example, an automatic revenue procedure

beginning date of the tax year following this short tax year

or a letter ruling request).

and file Form 1128, Application To Adopt, Change, or Retain

a Tax Year. If this change qualifies as an automatic approval

Signature

request (Form 1128, Part II), file Form 1128 as an

Form 2553 must be signed and dated by the president, vice

attachment to Form 2553. If this change qualifies as a ruling

president, treasurer, assistant treasurer, chief accounting

request (Form 1128, Part III), file Form 1128 separately. If

officer, or any other corporate officer (such as tax officer)

filing Form 1128, enter “Form 1128” on the dotted line to the

authorized to sign.

left of the entry space for item E.

If Form 2553 is not signed, it will not be considered timely

Column K. Shareholders’ Consent

filed.

Statement

Part II

For an election filed before the effective date entered for

item E, only shareholders who own stock on the day the

Complete Part II if you selected a tax year in Part I, Item I,

election is made need to consent to the election.

ending on any date other than December 31 (other than a

52-53-week tax year ending with reference to the month of

For an election filed on or after the effective date entered

December).

for item E, all shareholders or former shareholders who

owned stock at any time during the period beginning on the

Note. Corporations cannot obtain automatic approval of a

effective date entered for item E and ending on the day the

fiscal year under the natural business year (box P1) or

election is made must consent to the election.

ownership tax year (box P2) provisions if they are under

examination, before an appeals (area) office, or before a

If the corporation filed a timely election, but one or more

federal court without meeting certain conditions and

shareholders did not file a timely consent, see Regulations

attaching a statement to the application. For details, see

section 1.1362-6(b)(3)(iii). If the shareholder was a

section 7.03 of Rev. Proc. 2006-46, 2006-45 I.R.B. 859.

community property spouse who was a shareholder solely

because of a state community property law, see Rev. Proc.

Box P1

2004-35, 2004-23 I.R.B. 1029.

A corporation that does not have a 47-month period of gross

Each shareholder consents by signing and dating either

receipts cannot automatically establish a natural business

in column K or on a separate consent statement. The

year.

following special rules apply in determining who must sign.

•

If a husband and wife have a community interest in the

Box Q1

stock or in the income from it, both must consent.

For examples of an acceptable business purpose for

•

Each tenant in common, joint tenant, and tenant by the

requesting a fiscal tax year, see section 5.02 of Rev. Proc.

entirety must consent.

2002-39, 2002-22 I.R.B. 1046, and Rev. Rul. 87-57, 1987-2

•

A minor’s consent is made by the minor, legal

C.B. 117.

representative of the minor, or a natural or adoptive parent

Attach a statement showing the relevant facts and

of the minor if no legal representative has been appointed.

•

circumstances to establish a business purpose for the

The consent of an estate is made by the executor or

requested fiscal year. For details on what is sufficient to

administrator.

•

establish a business purpose, see section 5.02 of Rev. Proc.

The consent of an electing small business trust (ESBT) is

2002-39.

made by the trustee and, if a grantor trust, the deemed

owner. See Regulations section 1.1362-6(b)(2)(iv) for

If your business purpose is based on one of the natural

details.

business year tests provided in section 5.03 of Rev. Proc.

•

If the stock is owned by a qualified subchapter S trust

2002-39, identify which test you are using (the 25% gross

(QSST), the deemed owner of the trust must consent.

receipts, annual business cycle, or seasonal business test).

•

If the stock is owned by a trust (other than an ESBT or

For the 25% gross receipts test, provide a schedule showing

QSST), the person treated as the shareholder by section

the amount of gross receipts for each month for the most

1361(c)(2)(B) must consent.

recent 47 months. For either the annual business cycle or

-3-

Instructions For Form 2553 - Election By A Small Business Corporation - 2006 Page 3

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