Instructions For Form 2553 - Election By A Small Business Corporation Page 2

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day before the numerically corresponding day of the second
diligent actions to correct the mistake upon discovery. This
calendar month following that month. If there is no
information can be provided on line I of Form 2553 or on an
corresponding day, use the close of the last day of the
attached statement.
calendar month.
1. The corporation intended to be classified as an S
corporation as of the date entered on line E of Form 2553;
Example 1. No prior tax year. A calendar year small
business corporation begins its first tax year on January 7.
2. The corporation fails to qualify as an S corporation
The 2-month period ends March 6 and 15 days after that is
(see
Who May
Elect, earlier) on the effective date entered on
March 21. To be an S corporation beginning with its first tax
line E of Form 2553 solely because Form 2553 wasn’t filed
year, the corporation must file Form 2553 during the period
by the due date (see
When To Make the
Election, earlier);
that begins January 7 and ends March 21. Because the
3. The corporation has reasonable cause for its failure to
corporation had no prior tax year, an election made before
timely file Form 2553 and has acted diligently to correct the
January 7 won’t be valid.
mistake upon discovery of its failure to timely file Form 2553;
Example 2. Prior tax year. A calendar year small business
4. Form 2553 will be filed within 3 years and 75 days of
corporation has been filing Form 1120 as a C corporation but
the date entered on line E of Form 2553; and
wishes to make an S election for its next tax year beginning
5. A corporation that meets requirements (1) through (4)
January 1. The 2-month period ends February 28 (29 in leap
must also be able to provide statements from all
years) and 15 days after that is March 15. To be an S
shareholders who were shareholders during the period
corporation beginning with its next tax year, the corporation
between the date entered on line E of Form 2553 and the
must file Form 2553 during the period that begins the first day
date the completed Form 2553 is filed stating that they have
(January 1) of its last year as a C corporation and ends
reported their income on all affected returns consistent with
March 15th of the year it wishes to be an S corporation.
the S corporation election for the year the election should
Because the corporation had a prior tax year, it can make the
have been made and all subsequent years. Completion of
election at any time during that prior tax year.
Form 2553, Part I, column K, Shareholder's Consent
Example 3. Tax year less than 2 1/2 months. A calendar
Statement (or similar document attached to Form 2553), will
year small business corporation begins its first tax year on
meet this requirement; or
November 8. The 2-month period ends January 7 and 15
6. A corporation that meets requirements (1) through (3)
days after that is January 22. To be an S corporation
but not requirement (4) can still request relief for a late
beginning with its short tax year, the corporation must file
election on Form 2553 if the following statements are true.
Form 2553 during the period that begins November 8 and
a. The corporation and all its shareholders reported their
ends January 22. Because the corporation had no prior tax
income consistent with S corporation status for the year the S
year, an election made before November 8 won’t be valid.
corporation election should have been made, and for every
Relief for Late Elections
subsequent tax year (if any);
b. At least 6 months have elapsed since the date on
The following two sections discuss relief for late S
which the corporation filed its tax return for the first year the
corporation elections and relief for late S corporation and
corporation intended to be an S corporation; and
entity classification elections for the same entity. For
supplemental procedural requirements when seeking relief
c. Neither the corporation nor any of its shareholders was
for multiple late elections, see Rev. Proc. 2013-30, section
notified by the IRS of any problem regarding the S
4.04.
corporation status within 6 months of the date on which the
Form 1120S for the first year was timely filed.
When filing Form 2553 for a late S corporation election,
To request relief for a late election when the above
the corporation (entity) must enter in the top margin of the
requirements aren’t met, the corporation generally must
first page of Form 2553 “FILED PURSUANT TO REV. PROC.
request a private letter ruling and pay a user fee in
2013-30.” Also, if the late election is made by attaching Form
accordance with Rev. Proc. 2017-1, 2017-1 I.R.B. 1 (or its
2553 to Form 1120S, the corporation (entity) must enter in
the top margin of the first page of Form 1120S “INCLUDES
successor).
LATE ELECTION(S) FILED PURSUANT TO REV. PROC.
Relief for a Late S Corporation Election Filed By
2013-30.”
an Entity Eligible To Elect To Be Treated as a
The election can be filed with the current Form 1120S if all
Corporation
earlier Forms 1120S have been filed. The election can be
A late election to be an S corporation and a late entity
attached to the first Form 1120S for the year including the
classification election for the same entity may be available if
effective date if filed simultaneously with any other delinquent
the entity can show that the failure to file Form 2553 on time
Forms 1120S. Form 2553 can also be filed separately.
was due to reasonable cause. Relief must be requested
Relief for a Late S Corporation Election Filed by
within 3 years and 75 days of the effective date entered on
line E of Form 2553.
a Corporation
A late election to be an S corporation generally is effective for
To request relief for a late election, an entity that meets
the tax year following the tax year beginning on the date
the following requirements must explain the reasonable
entered on line E of Form 2553. However, relief for a late
cause for failure to timely file the election and its diligent
election may be available if the corporation can show that the
actions to correct the mistake upon discovery. This
failure to file on time was due to reasonable cause.
information can be provided on line I of Form 2553 or on an
attached statement.
To request relief for a late election, a corporation that
meets the following requirements must explain the
reasonable cause for failure to timely file the election and its
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