Late S Corp Election Issue

[David]

SMLLC chose to make a late election to be taxed as an S Corp with it's 2012 1120S. I completed Form 2553 and e-filed the client's 1120S. I thought the 2553 would be e-filed with the return but it must have not been - I use ATX.

The IRS sent my client a notice in May 2013 stating that it did not recognize the entity as an S Corp and that the client could file a late election under a couple of rev. procs.

I mailed the signed 2553 to the IRS at that time.

My client received another IRS letter for his 2013 1120S tax return stating that the IRS does not recognize the entity as an S Corp and that he can file a late election under Rev. Proc. 2013-30. It appears that Rev. Proc. 2013-30 has replaced all other late S eleciton Rev. Procs. and is now the only Rev. Proc. available for late S election. I filed the original 2553 pursuant to Rev. Proc. 2007-62.

I plan to fax a response to the IRS so I at least have a time stamp and proof that they received the late election.

My questions are:

1. Since Rev. Proc. 2013-30 allows late election within 3 years and 75 days from the time the entity wanted to be taxed as an S Corp., should I just file a new 2553 electing S Corp satus as of 1-1-12 pursuant to Rev. Proc. 2013-30?

2. In addition to filing a new 2553 should I also send a letter explaining why the S election is so late and enclose the original 2553 filed pursuant to Rev. Proc. 2007-62? Or will this confuse the IRS?

3. In either case, does the 2553 suffice for allowing the SMLLC to be treated as an S Corp at the beginning of 2012? Or does form 8832 also need to be filed? It appears that Rev. Proc. 2013-30 covers both a late entity election and late S Corp election but the instructions seem to only require Form 2553.

4. Since the client has 3 years and 75 days to file for the late election, should I send the new 2553 independent of the IRS letter or should I send it in response to the letter? The response date will be a couple days late of the requested response time per the IRS letter.

Thanks for your help.

[kcjenkins]

I'd send it in response to the letter.

[David]

Thanks, KC.

Would you also recommend sending the original 2553 that I completed in 2013 pursuant to Rev. Proc. 2007-62 to show that diligence was attempted in response to the first letter received in May 2013?

Also, is it necessary to also send Form 8832?

Thanks.

[kcjenkins]

Sure, dump it all on them, can't hurt, might help.