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Subject Author Date
Relief for late S-Corp election Ira Smilovitz 11-02-2006
Posted by Ira Smilovitz on November 2, 2006, 12:52 am
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 A client formed a new corporation earlier this year and
intended it to be an S-Corp. Unfortunately, he thought
he had 2 1/2 months from the start of operations to file
Form 2553 with the IRS, not 2 1/2 months from the creation
of the corporation. As expected, the IRS rejected the current
year application and established 1/1/07 as the effective date
for S-Corp status.

I'm looking at requesting relief under the provisions of Rev.
Proc. 2003-43. Does anyone know if the misinterpretation of
the filing deadline is sufficient reasonable cause or do I
need to be more "creative" in my explanation?

Thanks in advance.

Ira Smilovitz

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Posted by bc on November 2, 2006, 11:56 pm
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> A client formed a new corporation earlier this year and
> intended it to be an S-Corp. Unfortunately, he thought
> he had 2 1/2 months from the start of operations to file
> Form 2553 with the IRS, not 2 1/2 months from the creation
> of the corporation. As expected, the IRS rejected the current
> year application and established 1/1/07 as the effective date
> for S-Corp status.
>
> I'm looking at requesting relief under the provisions of Rev.
> Proc. 2003-43. Does anyone know if the misinterpretation of
> the filing deadline is sufficient reasonable cause or do I
> need to be more "creative" in my explanation?

Should work fine.

--
Bruce Davidson Cantor, CPA, JD
Admitted in Colorado

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Kreig Mitchell on November 2, 2006, 11:56 pm
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Ira Smilovitz wrote:

> A client formed a new corporation earlier this year and
> intended it to be an S-Corp. Unfortunately, he thought
> he had 2 1/2 months from the start of operations to file
> Form 2553 with the IRS, not 2 1/2 months from the creation
> of the corporation. As expected, the IRS rejected the current
> year application and established 1/1/07 as the effective date
> for S-Corp status.
>
> I'm looking at requesting relief under the provisions of Rev.
> Proc. 2003-43. Does anyone know if the misinterpretation of
> the filing deadline is sufficient reasonable cause or do I
> need to be more "creative" in my explanation?

Generally missing a filing deadline is not sufficient for
"reasonable cause," as ordinary business care would dictate
reading the applicable publication or seeking out
assistance. You should still make the argument, as
sometimes you can get these types of arguments accepted
(depending on how persuasive you are).

Kreig Mitchell
www.irstaxtrouble.com
www.irstaxtrouble.com/blog.htm

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

Posted by Paul Thomas, CPA on November 4, 2006, 10:35 pm
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> A client formed a new corporation earlier this year and
> intended it to be an S-Corp. Unfortunately, he thought
> he had 2 1/2 months from the start of operations to file
> Form 2553 with the IRS, not 2 1/2 months from the creation
> of the corporation. As expected, the IRS rejected the current
> year application and established 1/1/07 as the effective date
> for S-Corp status.
>
> I'm looking at requesting relief under the provisions of Rev.
> Proc. 2003-43. Does anyone know if the misinterpretation of
> the filing deadline is sufficient reasonable cause or do I
> need to be more "creative" in my explanation?

The key might be in ~why~ the client thought that. Was it
bad advice from an accountant or attorney? That'll work.

--
Paul Thomas, CPA
paulthomascpapc@bellsouth.net

<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>

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