Relief for Late S Corporation Elections: Revenue Procedure 2013-30, Reasonable Cause, and Form 2553

A Subchapter S election must be filed no more than two months and 15 days after the beginning of the tax year the election is to take effect, or at any time during the tax year preceding the tax year it is to take effect. Generally, for calendar year taxpayers, the election must be filed on or before March 15th following the tax year. This valuable election can help businesses avoid double taxation, reduce payroll taxes, and deduct initial or other operating losses.

Similarly, a missed, untimely filed, or improperly prepared Form 2553, Election by Small Business Corporation, can prove costly. A new business may be formed without consulting a tax professional, a deadline may be missed, or reviewing an initial year's return could create the need for S corporation status in retrospect. Fortunately, such curative relief is provided in Revenue Procedure 2013-30. General requirements must be met, including requesting relief within three years and 75 days from the effective date of the election. Also, the taxpayer must have and disclose reasonable cause for requesting late relief.

Listen as our panel of S corporation experts discusses properly preparing and filing Form 2553, relief available for missed, late, or improperly filed elections, and what constitutes reasonable cause when requesting this tax-saving status.

1. S elections
2. Late elections
   1. Improperly prepared elections
   2. Untimely filed elections
3. Revenue procedure 2013-30
4. Private letter rulings
5. LLCs electing S corporation status
6. Best practices

The panel will review these and other critical issues:

• Unique considerations for LLCs electing S corporation status
• What constitutes reasonable cause for a late Subchapter S election?
• Common reasons that the IRS declines S elections
• The procedures to follow to expedite acceptance of a late election under Revenue Procedure 2013-30

Learning Objectives

After completing this course, you will be able to:

• Identify types of late elections and relative procedures outlined in Revenue Procedure 2013-30
• Determine the deadline for filing a Subchapter S election
• Decide what constitutes reasonable cause for a late S election
• Ascertain differences in filing requirements for LLCs electing S status

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.

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IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).