IRS Authorizes Late S Corporation
Elections
As a general rule, you must elect S corporation status for a business entity
by the 15th day of the third month of the tax year. Therefore, an election
for 2008 must be made by March 17. (March 15 falls on a Saturday.) Otherwise,
you have to wait until next year.
However, under certain conditions, you may be able to obtain tax relief for a late election. Previously, the IRS required taxpayers to request a private letter ruling. Now it has authorized a simplified method for certain taxpayers.
To qualify for this special tax relief, you
must have “reasonable cause” for failing to file in a timely manner, among
other requirements. In addition, shareholders must treat their returns in a
consistent fashion. A professional tax adviser can provide the necessary
guidance in this area.
Wherewithal
is provided by Somerset for our clients and other interested persons
upon request. Since technical information is presented in generalized
fashion, no final conclusion on these topics should be made without
further review. For additional information on the issues, please
contact
a member of the firm. Somerset provides total financial solutions,
including accounting, assurance, information solutions, litigation &
valuation, tax, wealth management and management consulting services to
entrepreneurs and their businesses. This document is not intended or
written to be used, and cannot be used, for the purpose of avoiding tax
penalties that may be imposed on the taxpayer.
Somerset CPAs,
P.C.
3925 River Crossing Parkway, Third Floor
Indianapolis, Indiana 46240
317.472.2200 • 800.469.7206 • FAX 317.208.1200
www.somersetcpas.com
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