Late S Corporation Elections

If you are having trouble with any S corporation elections you need to know that there are ways to fix late or incomplete elections. This goes for the S corporation election, Electing Small Business Trust (ESBT) elections, Qualified Subchapter S Trust (QSST) elections, and Qualified Subchapter S Subsidiary (QSub) elections.

Eligibility to be classified as an S corporation goes further than just filing a form. Pertinent factors that need to be considered include but are not limited to; entity eligibility, shareholder eligibility, legal requirements, capital structure, election process, LLC’s as eligible entities, Q-sub elections, association status, trust structures, and converting from an existing C corporation.

If you failed to make the proper elections, the elections were late, or the elections contained flaws, you need to consult with a licensed tax practitioner to avoid mistakes. Maybe the IRS sent you a letter that your S election has been rejected. Or you’ve been in business a while, filed the tax return for an S corporation and the IRS sends you a letter stating that your corporation has not been granted S status and that you need to re-file using form 1120 for your C corporation. Contact our firm because we can help. Remember that your first attempt failed and your chances to fix this are going to run out.

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