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 use the following form and steps below.
Required form to be filed to change filing status:
Form 2553, Election by a Small Business Corporation PDF (See the Instructions for Form 2553 PDF for all required information) 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".
Step 1. Timely file a paper copy of Form 2553 with the appropriate Service Center as directed in the Form 2553 instructions PDF. 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 acknowledgment 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 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 initial Form 1120-S return filing 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.
Signature
Form 2553 must include all signatures as noted in the instructions for Form 2553. If the form is submitted without the proper signatures, it will not be considered timely thereby impacting the processing of your return.
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. 2024-1, (or its successor). If relief is available under Rev. Proc. 2013-30 the Service will not issue a letter ruling. Rev. Proc. 2024-1.
Example 1
- 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 Form 2553 with the Service Center that provided the notification of an invalid S election. Annotate at the top of the form "Filed pursuant to Rev. Proc. 2013-30." Attach to Form 2553 a statement establishing reasonable cause for the failure to timely file Form 2553. 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. 2024-1 (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.
Example 2
- Form 2553 has not been timely filed.
- Form 1120-S has not been filed for the first year of the intended S Corporation election.
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. 2024-1 (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, 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 and the reasonable cause statement with the appropriate Service Center as directed in the Form 2553 instructions prior to the filing of the Form 1120-S. This form and statement should be filed separately from any other returns or information. You may mail or fax this form. Annotate at the top of the form "Filed Pursuant to Rev. Proc. 2013-30". For additional details on eligibility to utilize this relief provision, see Rev. Proc. 2013-30. 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.