S Corporation election filed late
From Wikicpa
A regular C Corporation can file Form 2553 by the 15th day of the third month after the start of the corporation’s fiscal year. Since most S Corporations have a December 31 fiscal year-end date, the S-Corporation election must be filed by March 15th for the election to be effective as of January 1.
- For example, if a corporation with a December 31 year-end wants to be taxed as an S-Corporation effective January 1, 2007, the Form 2553 must be filed with the IRS no later than March 15th, 2007. Under normal circumstances, if the form is filed after the deadline, the election becomes effective at the start of the company’s next fiscal year.
Repair of late election
However, if you can show the IRS reasonable cause as to why the election was filed late and the election is filed no more than 24 months after the original due date, you may be able to successfully repair the late S-Corporation election and obtain IRS approval.
If the late election is more the one fiscal year after your proposed S-Corporation effective date, it is important that all of the shareholders report their proportionate share of the corporation’s income or loss on their personal tax returns for the period(s) that the company should have been taxed as an S-Corporation.
When you file Form 2553 after its due date, you should write "Filed Pursuant to Rev. Proc. 2003-43" across the top of the form. IRS Revenue Procedure 2003-43 is the technical authority for granting relief to late S-Corporation elections.
