Can a Late “S” Election be Fixed?

Yes.  The IRS has provided simplified procedures to correct a failure to make a timely “S” corporation election.   

If the corporation seeking the election has not filed a tax return for the first tax year of the intended election, the corporation may request relief for the late election by filing the properly completed election form within 18 months of the original election due date. A statement establishing reasonable cause for the failure to file timely must also be attached.

If the corporation seeking the election has already filed a tax return for the first tax year of the intended election, then the corporation may request relief for the late election by filing the properly completed election form and certain supporting documents within 24 months of the original election due date.  The supporting documents that must be attached include: a statement establishing reasonable cause for the failure to file the election timely, a completed Form 2553, a statement signed by all shareholders stating that they have reported their income consistent with the “S” election and a declaration signed by an officer of the corporation stating under penalties of perjury that, to the best of his or her knowledge, the facts presented in support of the election are true, correct, and complete.

Hope you found this material helpful. If you like what you read, forward this to a friend and tell them to check it out by clicking on the SenneySays logo.  If something you read here raises a question, or you need help fixing a late "S" election, please call or email at Jsenney@pselaw.com or 937-223-1130. 

AND ONE MORE THING.  The Small Business Administration recently unveiled a new program to benefit women-owned small business (“WOSB”).  Under the program, government contracts worth $2.5 billion dollars will be set-aside and awarded to WOSBs.   WOSBs must be majority owned, controlled and managed by one or more women.  More information is available at www.sba.gov/wosb.  Call or email me if you want to know more about this program or need help becoming certified as a WOSB. Jsenney@pselaw.com or 937-223-1130. 

AND ON A PERSONAL NOTE.  My son Garrett Thomas Senney graduated Sunday from The Ohio State University Fisher College of Business summa cum laude with a degree in Economics.  Garrett has been awarded a fellowship by The Ohio State University to continue his studies in Economics and earn a Phd degree.  We are very proud of him.