Late Elections

Internal Revenue Service Department of the Treasury
Washington, DC 20224
Number: 202241002
Release Date: 10/14/2022
Index Number: 1362.01-03
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Re: ---
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Legend
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
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Telephone Number:
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Refer Reply To:
CC:PSI:03
PLR-103509-22
Date:
July 18, 2022
X = ---
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A = ---
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State = ---
Date = ---
Dear ---:
This letter responds to a letter dated January 7, 2022, and subsequent correspondence submitted on behalf of X by its authorized representative, requesting a ruling under § 1362(b)(5) of the Internal Revenue Code (Code) to treat its S corporation election as timely made.

# FACTS

Based on the information submitted, X was incorporated under the laws of State on Date. X intended to elect to be treated as an S corporation for federal tax purposes effective Date, but a proper election was not timely made. X's sole shareholder, A, filed their federal tax returns consistent with X’s treatment as an S corporation for all periods since Date.

# LAW AND ANALYSIS

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Section 1362(a)(1) provides that, except as provided in § 1362(g), a small business corporation may elect, in accordance with § 1362, to be an S corporation.
Section 1362(b)(1) provides that an election under § 1362(a) may be made by a small business corporation for any taxable year (A) at any time during the preceding taxable year, or (B) at any time during the taxable year and on or before the 15th day of the third month of the taxable year.
Section 1362(b)(3) provides that if (A) a small business corporation makes an election under § 1362(a) for any taxable year, and (B) such election is made after the 15th day of the third month of the taxable year and on or before the 15th day of the third month of the following taxable year, then such election is treated as made for the following taxable year.
Section 1362(b)(5) provides that if (A) an election under § 1362(a) is made for any taxable year (determined without regard to § 1362(b)(3)), 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 (B) the Secretary determines that there was reasonable cause for the failure to timely make such election, the Secretary may treat such an election as timely made for the taxable year (and § 1362(b)(3) shall not apply).

# CONCLUSION

Based solely on the facts submitted and the representations made, we conclude that X has established reasonable cause for not making a timely election and is eligible for relief under § 1362(b)(5). Accordingly, X’s S corporation election will be treated as timely made effective Date.
This ruling is contingent on X filing Form 2553, Election by a Small Business
Corporation, with an effective date of Date with the appropriate service center within
120 days from the date of this letter. A copy of this letter should be attached to the Form
2553 filed with the service center.
Further, this ruling is contingent on X and its shareholder, A, filing federal income tax returns consistent with the treatment of X as an S corporation.
Except as specifically set forth above, we express or imply no opinion concerning the tax consequences of the facts of this case under any other provision of the Code and the regulations thereunder. In addition, we express or imply no opinion concerning whether X is otherwise eligible to be an S corporation for federal tax purposes.
The ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the ruling request, it is subject to verification on examination.
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This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) provides that it may not be used or cited as precedent.
Pursuant to a power of attorney on file with this office, we are sending a copy of this letter to X’s authorized representative.
Sincerely,
Associate Chief Counsel
(Passthroughs & Special Industries)
/s/ Margaret Burow
By: ____
Margaret Burow
Senior Counsel, Branch 3
Office of Associate Chief Counsel
(Passthroughs & Special Industries)
Enclosure:
Copy for § 6110 purposes cc:
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