IRS PLR: Late Entity Classification Election Relief Granted (IRC §1362)

In two PLRs, a small business corporation (“X”) received an extension of time to elect to be treated as an association taxable as a corporation for federal tax purposes and to file a late S corporation election under tax code Section 1362(b)(5). According to the representation, X, whose default classification was a partnership, intended to make both elections but inadvertently failed to properly and timely file Form 2553, Election by a Small Business Corporation, and Form 8832, Entity Classification Election. The IRS concluded that X established reasonable cause for the failure. Provided X now timely files ...