IRS Simplifies Late S Corp and Other Elections

On August 14, 2013 the Internal Revenue Service combined parts of several revenue procedures that have been issued over the past 15 years into a new revenue procedure that provides relief to companies that make late elections to become S corporations.

Revenue Procedure 2013-30 provides the exclusive simplified methods for taxpayers to request relief for late S corporation elections, Electing Small Business Trust elections, Qualified Subchapter S Trust elections, Qualified Subchapter S Subsidiary elections and late corporate classification elections that the taxpayer intended to take effect on the same date that the taxpayer intended that an S corporation election for the entity should take effect. The revenue procedure provides relief if the taxpayer satisfies certain requirements.

Along with the Revenue Procedure are four flowcharts designed to help taxpayers apply the revenue procedure to the late election for their situation. The updated rules generally extend the time to ask for a late S corporation election until three years and 75 days after the election was planned to take effect. If taxpayers do not qualify for the simplified relief, they can still ask for a private letter ruling from the IRS.

© 2013 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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