PLR 200215021: Late S corporation election granted relief

Plain-English summary

A corporation's sole shareholder wanted S corporation treatment from a specified date, but the corporation did not file its election on time. Based on the submitted facts and representations, the IRS ruled that the corporation would be treated as an S corporation from that date if it otherwise qualifies. The corporation was directed to send a completed Form 2553 with a copy of the ruling to the relevant service center within 60 days. The IRS did not decide whether the corporation meets the small business corporation requirements of § 1361(b).

Ruling snapshot

• Question: Can the corporation's late S election take effect on the requested date?
• Outcome: Approved, subject to qualification and filing Form 2553 within 60 days
• Key authorities: IRC §§ 1361(b), 1362(b)(5)

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury

Number: 200215021
Washington, DC 20224
Release Date: 4/12/2002
Index Number: 1362.01-03
Person to Contact:

Telephone Number:

Refer Reply To:
CC:PSI:2-PLR-148755-01
Date:
January 9, 2002

Legend

X
=

Date 1 =

Date 2 =

Dear

This responds to a letter dated September 10, 2001, submitted by X’s authorized representative, on behalf of X, requesting a ruling under § 1362(b)(5) of the Internal Revenue Code.

The information submitted states that X was incorporated on Date 1. The sole shareholder of X desired that X elect S corporation treatment of X, effective on Date 2, but the election to be treated as an S corporation was not timely filed. Accordingly, X requests a ruling that it will be treated as an S corporation effective Date 2.

Section 1362(b)(5) of the Code provides that if -- (A) an election under §1362(a) is made for any taxable year after the date prescribed by §1362(b) for making such election for such taxable year or no such election is made for any taxable year, and (B) the Secretary determines that there was reasonable cause for the failure to timely make such election, the Secretary may treat such an election as timely made for such taxable year.

Based solely on the facts submitted and the representations made, and provided that X otherwise qualifies as an S corporation, we conclude that X will be treated as an S corporation effective Date 2. Within 60 days from the date of this letter, X should submit a properly completed Form 2553, with a copy of this letter attached, to the relevant service center.

PLR-148755-01
2

Except as specifically ruled upon above, no opinion is expressed concerning the federal tax consequences of the facts described above under any other provisions of the Code, including whether X was or is a small business corporation under § 1361(b).

This ruling is directed only to the taxpayer(s) requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.

Pursuant to a power of attorney on file with this office, a copy of this letter is being sent to X’s authorized representative.

Sincerely yours,

Matthew Lay
Senior Technician Reviewer, Branch 2
Associate Chief Counsel
(Passthroughs and Special Industries)

Enclosures: 2
Copy of this letter
Copy for §6110 purposes