Relief for late S-Corp election

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

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Reply to
Ira Smilovitz
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Should work fine.

-- Bruce Davidson Cantor, CPA, JD Admitted in Colorado

Reply to
bc

Generally missing a filing deadline is not sufficient for "reasonable cause," as ordinary business care would dictate reading the applicable publication or seeking out assistance. You should still make the argument, as sometimes you can get these types of arguments accepted (depending on how persuasive you are). Kreig Mitchell

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Kreig Mitchell

"Ira Smilovitz" wrote

The key might be in ~why~ the client thought that. Was it bad advice from an accountant or attorney? That'll work.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

Reply to
Paul Thomas, CPA

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