| IRS Offers Relief for Late S Corporation Elections |
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Businesses that are eligible to elect S corporation tax treatment now have a simpler process for requesting relief for late elections, thanks to an IRS Taxpayer Burden Reduction initiative. Revenue Procedure 2007-62, announced in IRS news release IR-2007-166, outlines the new provision that permits 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. The requirement for filing Form 2553 to establish the election in advance of filing the initial Form 1120S remains in effect. However, the new process will save time and effort for those taxpayers who can establish reasonable cause for making a late election. Form 2553 will be updated to reflect Rev. Proc. 2007-62, so taxpayers filing paper Forms 2553 should download the most recent revision from IRS.gov. Form 2553 can also be submitted electronically as an attachment to an e-filed Form 1120S. To learn about IRS announcements and other IRS products and services, subscribe to IRS’s e-News for Small Businesses. To see a representative sample and to start your free subscription to e-News, just go to IRS.gov at http://www.irs.gov/businesses/small/content/0,,id=154826,00.html, type in your e-mail address and submit. |
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