Late Elections

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 201724006
Release Date: 6/16/2017
Index Number: 1362.01-03
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Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
---, ID No. ---
Telephone Number:
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Refer Reply To:
CC:PSI:B01
PLR-127362-16
Date:
March 03, 2017
X = ---
State = ---
Date 1 = ---
Date 2 = ---
Dear ---
This responds to a letter dated July 21, 2016, and subsequent correspondence, submitted on behalf of X by its authorized representative, requesting a ruling under § 1362(b)(5) of the Internal Revenue Code.

# FACTS

The information submitted states that X was incorporated in State on Date 1. X was eligible to elect S corporation treatment effective Date 2; however, a Form 2553, Election by a Small Business Corporation, was not timely filed for X.

# LAW AND ANALYSIS

Section 1362(a) provides that a small business corporation may elect to be an S corporation.
Section 1362(b) provides the rule on when an S election will be effective. Generally, if an S election is made within the first two and one-half months of a corporation's taxable year, then the corporation will be treated as an S corporation for the year in which the election is made. Section 1362(b)(3) provides that if an S election is made after the first two and one-half months of a corporation's taxable year, then the corporation will not be PLR-127362-16 2 treated as an S corporation until the taxable year after the year in which the S election is made.
Section 1362(b)(5) provides that if (1) an election under § 1362(a) is made for any taxable year after the date prescribed by § 1362(b) for making the election for the taxable year or no § 1362(a) election is made for any taxable year, and (2) the Secretary determines that there was reasonable cause for the failure to timely make the election, then the Secretary may treat the election as timely made for such taxable year and § 1362(b)(3) shall not apply.

# CONCLUSION

Based solely on the facts and the representations submitted, we conclude that X has established reasonable cause for failing to make a timely election to be an S corporation effective Date 2. Accordingly, provided that X makes an election to be an S corporation by filing a completed Form 2553 with the appropriate service center effective Date 2 within 120 days following the date of this letter, then such election will be treated as timely made for X's taxable year beginning Date 2. A copy of this letter should be attached to the Form 2553.
Except as specifically set forth above, no opinion is expressed or implied as to the federal income tax consequences of the transaction described above under any other provision of the Code. Specifically, no opinion is expressed concerning whether X is, in fact, an S corporation for federal tax purposes.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.
Sincerely,
Joy C. Spies
Joy C. Spies
Senior Technician Reviewer, Branch 1
Office of the Associate Chief Counsel
(Passthroughs & Special Industries)
Enclosures (2)
Copy of this letter
Copy for § 6110 purposes