How to File a Late Election Form 2553

Form 2553, Election by a Small Business Corporation, is the document a corporation files to be taxed as an S Corporation, a structure that allows income and losses to be passed through to shareholders’ personal returns. Missing the filing deadline, generally the 15th day of the third month of the tax year the election is to take effect, is a frequent oversight for new business owners. The Internal Revenue Service (IRS) has established procedures for businesses to request relief and file a late election. These procedures provide a pathway for eligible corporations to correct the oversight and obtain S Corporation status retroactively.

Determining Eligibility for Late Filing Relief

To qualify for late election relief, a business must meet specific criteria under Revenue Procedure 2013-30. The primary requirement is that the corporation intended to be an S Corporation from the desired effective date, and the only reason it failed to qualify was the missed deadline for Form 2553. The entity must also be an otherwise eligible corporation, meeting all other S Corp requirements like having no more than 100 shareholders and only one class of stock.

A component of eligibility is demonstrating “reasonable cause” for the failure to file on time, which is a facts-and-circumstances test. Examples include reliance on a tax professional who failed to file the form as instructed, or an honest mistake by an owner unaware of the filing requirement. For instance, an owner might have mistakenly believed the form could be filed with the first corporate tax return, Form 1120-S, rather than by the separate deadline.

The request for relief must generally be made within three years and 75 days of the intended effective date of the S Corp election. The corporation must also show it acted diligently to correct the mistake as soon as it was discovered. This means promptly preparing and submitting the late election request without undue delay.

Information and Documentation for the Late Election

You must use the official, current version of Form 2553, which can be downloaded from the IRS website. The form’s key sections are Part I, Election Information, and Part II, Shareholders’ Consent Statement. Part I requires basic corporate information, the intended effective date of the election, and details about the corporation’s tax year.

A required addition for a late filing is a detailed “Reasonable Cause Statement.” This is a separate document you must draft and attach to your Form 2553 explaining the facts and circumstances that led to the failure to file on time. The statement needs to show why the corporation had reasonable cause for the delay and demonstrate that it acted diligently to correct the error upon discovery, detailing who was responsible, what went wrong, and when the error was found.

All individuals who were shareholders at any point from the intended S Corp effective date to the date of the late filing must consent to the election. This is typically accomplished by having each shareholder sign and date the consent statement in Part I, column K of Form 2553. If it is not feasible to have everyone sign the same form, separate consent statements can be attached, provided they contain the same information and are signed.

The Submission Process for a Late Form 2553

To ensure the filing is processed correctly, write “FILED PURSUANT TO REV. PROC. 2013-30” at the top of the first page of Form 2553. This notation alerts the IRS that you are seeking relief for a late election and directs it to the proper review channel.

Assemble the complete package with the annotated Form 2553 on top, followed by the reasonable cause statement and any separate shareholder consent statements. The filing must be mailed or faxed, as electronic filing is not an option. The correct mailing address depends on the corporation’s location and can be found in the official instructions for Form 2553.

After submission, the IRS will review the request, which can take several months. The corporation will receive a determination letter that either approves the late election, granting S Corp status from the requested date, or denies it. If denied, the letter will explain the reason, and the corporation will be taxed as a C Corporation for the period in question.