IRS grants late S corporation election relief

Plain-English summary

A corporation intended to elect S corporation status but inadvertently failed to timely file Form 2553. It asked the IRS to treat the election as timely under IRC § 1362(b)(5). The IRS found that the corporation had reasonable cause for the late filing and granted relief, provided the corporation otherwise qualifies as an S corporation and submits a properly completed Form 2553 with a copy of the ruling letter within 120 days. The relief makes the election effective as of the specified date.

Ruling snapshot

• Question: Should the corporation receive relief for its late S corporation election under § 1362(b)(5)?
• Outcome: Approved, subject to filing Form 2553 within 120 days and satisfying the other stated conditions.
• Key authorities: IRC §§ 1362(a), 1362(b)(2), 1362(b)(3), 1362(b)(5), and 6110(k)(3).

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202636013
Third Party Communication: None
Release Date: 9/4/2026
Date of Communication: Not Applicable
Index Number: 1362.00-00, 1362.01-03
Person To Contact:
-------------------
---------------------------, ID No. ---------------
----------------------------------------- -----------------
--------------------------------------
Telephone Number:
---------------------------
---------------------
----------------------------
Refer Reply To:
CC:PT&E:B01
PLR-120229-25
Date:
June 11, 2026

LEGEND

X = ----------------------------------------------------------------------------------------------------
-----------------------

A = --------------------------

State = -------------

Date = ----------------------

Dear --------------------:

This responds to a letter dated December 5, 2025, and subsequent correspondence, submitted on behalf of X by X’s authorized representative, requesting relief under § 1362(b)(5) of the Internal Revenue Code (Code).

FACTS

According to the information submitted, X was incorporated under the laws of State on Date. A, the sole shareholder of X, intended for X to be an S corporation for federal tax purposes effective Date. However, X inadvertently failed timely to file a Form 2553, Election by a Small Business Corporation. Accordingly, X requests a ruling that it will be treated as an S corporation effective Date.

PLR-120229-25
2

LAW AND ANALYSIS

Section 1362(a) provides that a small business corporation may elect to be an S corporation. Section 1362(b) provides the rule on when an S election will be effective.

Section 1362(b)(2) provides that if an S election is made within the first two and one-half months of a corporation's taxable year, then the corporation will be treated as an S corporation for the year in which the election is made.

Section 1362(b)(3) provides that if the election is made after the first two and one-half months of a corporation's taxable year, then the corporation will not be treated as an S corporation until the taxable year after the year in which the S election is made.

Section 1362(b)(5) provides that if no election is made pursuant to § 1362(a), or, if made, the election is made after the date prescribed for making such an election, and the Secretary determines there was reasonable cause for the failure to timely make the election, then the Secretary may treat such election as timely made for such taxable year and effective as of the first day of that year.

X did not file a timely election to be treated as an S corporation under § 1362(a) effective Date. X has, however, established reasonable cause for not making a timely election and is entitled to relief under § 1362(b)(5).

CONCLUSION

Based solely on the facts submitted and representations made, and provided that X otherwise qualifies as a subchapter S corporation, we conclude that X will be recognized as an S corporation effective Date if, within 120 days from the date of this letter, X submits a properly completed Form 2553, with a copy of this letter attached, to the appropriate service center.

Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter. Specifically, no opinion is expressed or implied concerning whether X otherwise qualifies as an S corporation for federal tax purposes.

The ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the ruling request, it is subject to verification upon examination.

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

PLR-120229-25
3

In accordance with the power of attorney on file with this office, we are sending a copy of this letter to X's authorized representative.

Sincerely,

Joy C. Spies
Senior Technician Reviewer, Branch 1
Office of the Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

Enclosure:
Copy for § 6110 purposes

cc: ------------------
--------------------------
-------------------------------------------------
----------------------
----------------------------

------------------
------------------------------
-----------------------------------------------------
-----------------------------
----------------------------

----------------------------------
-----------------------------------------
------------