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Relief for Late S Corporation Elections: Revenue Procedures 2013-30 and 2022-19, Reasonable Cause, and Form 2553

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Monday, June 12, 2023

Recorded event now available

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This course will explain the steps outlined in Revenue Procedure 2013-30 to facilitate granting S corporation status to businesses requesting late election relief, as well as the more recent Revenue Procedure 2022-19, which identifies a number of issues involving S corporations that may be resolved without a private letter ruling. Our panel of S corporation experts will explain how to file a late S election, eligibility for filing a late election, and LLCs electing S corporation status for tax practitioners working with pass-through entities.

Description

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 beginning of 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.

Our panel will also discuss the more recent Revenue Procedure 2022-19, which identifies a number of issues involving S corporations that may be resolved without a private letter ruling. The revenue procedure includes helpful guidance on addressing minor errors in completing and filing Form 2553, missing shareholder consents, tax returns filed inconsistently with the intended status, obtaining duplicate acceptance letters, and corrective actions for entities with certain defects in their governing provisions.

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Outline

  1. S elections
  2. Late elections
    1. Improperly prepared elections
    2. Untimely filed elections
  3. Revenue procedure 2013-30
  4. Private letter rulings
  5. Revenue Procedure 2022-19
  6. LLCs electing S corporation status
  7. Best practices

Benefits

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
  • The procedures set forth in Revenue Procedure 2022-19 to address specified issues involving S corporations

Faculty

Anderson, Kevin
Kevin Anderson, J.D., CPA
Partner, National Tax Office
BDO USA

Mr. Anderson's practice is focused in the areas of mergers and acquisitions, S corporations, Ccorporations,...  |  Read More

Shaver, Daren
Daren R. Shaver
Partner
Hanson Bridgett

Mr. Shaver is a transactional tax attorney, helping clients achieve their objectives in a practical and tax-efficient...  |  Read More

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