Filing Requirements for Filing Status Change

 

C Corporation Requesting a Change to File as an S Corporation

When changing their filing status from a C corporation (filing Form 1120) to an S corporation (filing Form 1120-S), the Internal Revenue Service reminds taxpayers to follow the steps below and use the following form.

Required form to be filed to change filing status:

Signature

Form 2553 must be signed and dated by a corporate officer authorized to sign on behalf of the corporation, and be accompanied by the written consent of all the corporation’s shareholders. If Form 2553 is not signed, it will not be considered timely filed.

Alert: Please ensure that your Form 2553 includes all signatures as noted in the instructions for the Form 2553. If the form is submitted without the proper signatures, it will not be considered timely, and will impact the processing of your return. Form 2553 is required to be submitted in PDF format if the taxpayer is submitting the form with its timely e-filed return. The PDF file must be named “Form2553.pdf” and described as “Form 2553.”

Step 1. Timely file a paper copy of the Form 2553 with the appropriate Service Center as directed in the Form 2553 instructions. You may mail or fax this form. See instructions to Form 2553 for mailing addresses and fax numbers.

Step 2. The corporation will receive an acknowledgement if the S corporation election is accepted and when it will take effect. The corporation will also be notified if the election isn’t accepted. If the notification of acceptance or nonacceptance is not received, the corporation should follow up by calling 1-800-829-4933.

Step 3. File the last C corporation return (Form 1120) by the due date or extended due date.

Step 4. File the S corporation return (Form 1120-S) by the due or extended due date.

The filing of the initial Form 1120-S return will finalize the change of the entity’s filing requirement on the Internal Revenue Service’s records.

Note: Some corporate taxpayers are required to file electronically. For additional information on which corporate filers are required to file electronically, please see T.D. 9363, 2007-49 I.R.B. 1084.

Guidance for taxpayers who have not timely filed their election request to be treated as an S Corporation. 

If the Form 2553 has not been timely filed, the corporation may obtain relief for certain late S elections by following the procedures in Rev. Proc. 2013-30, 2013-36 I.R. B. 173 as discussed below. If relief is not available under Rev. Proc. 2013-30, the corporation must generally request relief for the late election by requesting a private letter ruling and paying a user fee in accordance with Rev. Proc. 2020-1, (or its successor). If relief is available under Rev. Proc. 2013-30 the Service will not issue a letter ruling. Rev. Procedure 2020-3, Section 4.01(47) and Section 6.06.

Form 2553 Has Not Been Timely Filed

Form 1120-S Has Been Timely Filed for the First Year of the Intended S Corporation Election

If the Form 2553 has not been timely filed, a corporation’s Form 1120-S cannot be accepted and processed by the Service Center. The Service Center will notify the corporation of the invalid S election and the corporation should follow these steps:

Step 1.  File a paper copy of the Form 2553 with the Service Center that provided the notification of invalid S election.  Annotate at the top of the form “Filed pursuant to Rev. Proc. 2013-30." Attach to the Form 2553 a statement establishing reasonable cause for the failure to file Form 2553 timely.  For additional details on eligibility to utilize this relief provision, see Rev. Proc. 2013.30.  Mail the Form 2553 and the attached reasonable cause statement to the Service Center separate from any other returns or information being submitted. Note: If you are not eligible to utilize Rev. Proc. 2013-30, you must follow the guidance in Rev. Proc. 2020-1 (or its successor.) to request a private letter ruling.

Step 2.  File the last C corporation return (Form 1120) by the due or extended due date.  Note: Some taxpayers are required to file electronically.

Form 2553 Has Not Been Timely Filed

Form 1120-S Has Not Been Filed for the First Year of the Intended S Corporation Election

If the Form 2553 has not been timely filed and the Form 1120-S has not been filed, you should follow these steps when filing:

Step 1. You have two options for Step 1. If you fail to qualify for Step A, use Step B.  Only one of the two is required.  Note: If you fail to qualify for Step A or B, then the corporation must generally request relief for the late election by requesting a private letter ruling and paying a user fee in accordance with Rev. Proc. 2020-1 (or its successor). 

A. File a copy of the Form 2553 with the initial Form 1120-S.  On the Form 2553, provide a statement establishing reasonable cause for the failure to file the Form 2553 timely and enter in the top margin of page 1, “Filed Pursuant to Rev. Proc. 2013-30”.  Also, on Form 1120-S the corporation must enter in the top margin of the first page, “Includes Late Election(s) Filed Pursuant to Rev. Proc. 2013-30.”

Note: To qualify for this relief provision, the Form 1120-S and attached Form 2553 must be filed -within 3 years and 75 days after the effective date of the election and all other delinquent Forms 1120-S are filed simultaneously and consistently with the requested relief. For additional details on eligibility to utilize this relief provision, see Rev. Proc. 2013-30.

OR

B. File a paper copy of the Form 2553 with the appropriate Service Center as directed in the Form 2553 instructions.  You may mail or fax this form.  Annotate at the top of the form “Filed Pursuant to Rev. Proc. 2013-30”.  Attach to the Form 2553 a statement establishing reasonable cause for the failure to file the Form 2553 timely.  For additional details on eligibility to utilize this relief provision, see Rev. Proc. 2013-30.  Mail this form and the attached reasonable cause statement to the Service Center separate from any other returns or information being submitted. The Form 2553 should be filed prior to the filing of the Form 1120-S.  The Form 1120-S should not be filed until the corporation is notified of the S election acceptance.

Step 2.  File the last C corporation return (Form 1120) by the due or extended due date.

Return to:  E-file for Large and Mid-Size Corporations