Instructions For Form 2553 - Election By A Small Business Corporation

(entity) first had assets, or (c) the date the corporation

consent statement, attach it to Form 2553. It must

(entity) began doing business. This same date will be

contain the name, address, and EIN of the corporation

entered for item H.

and the information requested in columns J through N of

Part I.

A corporation (entity) not making the election for its

first tax year in existence that is keeping its current tax

Column L

year should enter the beginning date of the first tax year

Enter the number of shares of stock each shareholder

for which it wants the election to be effective.

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

A corporation (entity) not making the election for its

stock was acquired. Enter -0- for any former

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

shareholders listed in column J. An entity without stock,

wants to be an S corporation for the short tax year

such as a limited liability company (LLC), should enter

needed to switch tax years should enter the beginning

the percentage of ownership and date(s) acquired.

date of the short tax year. If the corporation (entity) does

Column M

not want to be an S corporation for this short tax year, it

should enter the beginning date of the tax year following

Enter the social security number of each individual listed

this short tax year and file Form 1128, Application To

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

Adopt, Change, or Retain a Tax Year. If this change

or exempt organization.

qualifies as an automatic approval request (Form 1128,

Column N

Part II), file Form 1128 as an attachment to Form 2553. If

this change qualifies as a ruling request (Form 1128, Part

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

III), file Form 1128 separately. If filing Form 1128, enter

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

“Form 1128” on the dotted line to the left of the entry

enter the tax year the shareholder is changing to, and

space for item E.

attach an explanation indicating the present tax year and

the basis for the change (for example, an automatic

Column K. Shareholders’ Consent

revenue procedure or a letter ruling request).

Statement

Signature

For an election filed before the effective date entered for

Form 2553 must be signed and dated by the president,

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

vice president, treasurer, assistant treasurer, chief

election is made need to consent to the election.

accounting officer, or any other corporate officer (such as

For an election filed on or after the effective date

tax officer) authorized to sign.

entered for item E, all shareholders or former

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

shareholders who owned stock at any time during the

timely filed.

period beginning on the effective date entered for item E

and ending on the day the election is made must consent

Part II

to the election.

Complete Part II if you selected a tax year ending on any

If the corporation filed a timely election, but one or

date other than December 31 (other than a 52-53-week

more shareholders did not file a timely consent, see

tax year ending with reference to the month of

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

December).

was a community property spouse who was a

shareholder solely because of a state community

Note. Generally, the corporation cannot obtain automatic

property law, see Rev. Proc. 2004-35, 2004-23 I.R.B.

approval of a fiscal year under the natural business year

1029.

(Box P1) or ownership tax year (Box P2) provisions if it is

under examination, before an area office, or before a

Each shareholder consents by signing and dating

federal court with respect to any income tax issue and

either in column K or on a separate consent statement.

the annual accounting period is under consideration. For

The following special rules apply in determining who

details, see section 4.02 of Rev. Proc. 2002-38, 2002-22

must sign.

•

I.R.B. 1037.

If a husband and wife have a community interest in the

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

Box P1

•

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

Attach a statement showing separately for each month

entirety must consent.

•

the amount of gross receipts for the most recent 47

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

months. A corporation that does not have a 47-month

representative of the minor, or a natural or adoptive

period of gross receipts cannot automatically establish a

parent of the minor if no legal representative has been

natural business year.

appointed.

•

The consent of an estate is made by the executor or

Box Q1

administrator.

•

For examples of an acceptable business purpose for

The consent of an electing small business trust (ESBT)

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

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

Proc. 2002-39, 2002-22 I.R.B. 1046, and Rev. Rul.

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

87-57, 1987-2 C.B. 117.

details.

•

If the stock is owned by a qualified subchapter S trust

Attach a statement showing the relevant facts and

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

circumstances to establish a business purpose for the

•

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

requested fiscal year. For details on what is sufficient to

QSST), the person treated as the shareholder by section

establish a business purpose, see section 5.02 of Rev.

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

Proc. 2002-39.

Continuation sheet or separate consent statement.

If your business purpose is based on one of the

If you need a continuation sheet or use a separate

natural business year tests provided in section 5.03 of

-3-

Instructions For Form 2553 - Election By A Small Business Corporation - 2005 Page 3

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