Election by Small Business Corporation

ID:
Office:
UILC:
CCA_2009061712001939
---
1362.00-00
Number: 200929006
Release Date: 7/17/2009
From: ---
Sent: Wednesday, June 17, 2009 12:00:26 PM
To: ---
Cc:
Subject: RE: S corp issue regarding PLR
---
As we discussed earlier, here are my thoughts on the ---case:
The taxpayers have a very sympathetic case. They sought to be entrepreneurial and started a small business in --- or --- but the business failed, and dissolved in ---. The business was formed as a corporation, and the taxpayers sent in a Form 2553 to have to business treated as an S corp as of ---, and filed subsquent tax returns assuming that the business was an S corp. They did not have any reason to think otherwise until ---, when the IRS informed them that their Form 2553 had been rejected on a technicality.
My office routinely grants PLR relief under Section 1362(b)(5) to similarly situated taxpayers. While every case needs to be reviewed separately, it appears to me that the taxpayers have a very clear cut case for PLR relief. Unfortunately, they cannot pay the PLR fee since they are bankrupt. ------------Many thanks, ---