Running late with S corp election? 5 conditions for relief June 30, 2016 Share Subscribe RFP If an S corporation conversion is in your future, you’ll need to prepare to make your IRS tax election properly and on time. Even if an election is late, though, a corporation can still get relief and avoid the negative consequences of being classified as a C corporation, if it meets these five conditions: Must have intended to be classified as an S corporation as of the requested effective date of the S election Must request relief within three years and 75 days after the intended effective date of the S election, with one exception Must have failed to qualify as an S corporation solely because the S election wasn’t filed by the due date of that S election Must have reasonable cause for its failure to make a timely S election and must have acted diligently to correct the mistake when it was discovered Must have all shareholders report their income during the period between the date the S election was to have become effective and the date Form 2553 is filed, on all affected returns consistent with the S election for the year of the election and all subsequent years; a statement to that effect must be attached to Form 2553 For more information about relief from late S corporation elections, please contact Bryan Keith at +1 202 861 4116. Tax professional standards statement This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.