The Internal Revenue Service has given businesses a simpler process for requesting relief for late elections.
Revenue Procedure 2007-62 allows small businesses that missed filing Form 2553, Election by a Small Business Corporation, before filing their first Form 1120S, U.S. Income Tax Return for an S Corporation, to file both forms simultaneously. The change is effective for taxable years that end on or after Dec. 31, 2007.
However, the requirement for filing Form 2553 to establish the election in advance of filing the initial Form 1120S remains in effect. The new process will save time for taxpayers who can establish a reasonable cause for making a late election.
Form 2553 will be updated to reflect the new rules. Taxpayers who file the paper version of the form need to download the most recent revision from IRS.gov. The form can also be attached to an electronically filed Form 1120S.
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