A client formed a new corporation earlier this year and intended it to be an S-Corp. Unfortunately, he thought he had 2 1/2 months from the start of operations to file Form 2553 with the IRS, not 2 1/2 months from the creation of the corporation. As expected, the IRS rejected the current year application and established 1/1/07 as the effective date for S-Corp status.
I'm looking at requesting relief under the provisions of Rev. Proc. 2003-43. Does anyone know if the misinterpretation of the filing deadline is sufficient reasonable cause or do I need to be more "creative" in my explanation?
Thanks in advance.
Ira Smilovitz