Late S-Corp Election

A late S-Corp election sounds intimidating, but the IRS has actually made it easier over the years. The current relief procedure, set out in Rev. Proc. 2013-30, lets eligible entities file a late Form 2553 with a simple reasonable-cause statement and skip the costly private-letter-ruling process that used to be the only option. Most missed elections — whether off by a week or by two years — qualify.

This guide explains who is eligible, what to write, and how to file. It is educational only and is not a substitute for personalized tax or legal advice. If your situation is unusual, please consult a CPA or tax attorney.

What Rev. Proc. 2013-30 actually does

Rev. Proc. 2013-30 consolidates earlier IRS late-election relief procedures into a single streamlined process. It allows an otherwise-eligible entity to be treated as if Form 2553 had been filed on time, provided the entity certifies a few facts and provides a reasonable explanation for the lateness. There is no IRS user fee. There is no need to request a private letter ruling. The relief is granted by simply filing Form 2553 in the right way.

Eligibility: the five requirements

To use Rev. Proc. 2013-30, all five of the following must be true:

1. The entity intended to be an S-Corp as of the requested effective date. This is usually demonstrated by behavior — running payroll, taking distributions, treating income as S-Corp income on books and bank accounts, etc.
2. The only thing that prevented S-Corp status was the failure to timely file Form 2553. The entity must otherwise have met every S-Corp eligibility requirement (domestic entity, allowable shareholders, single class of stock, 100-shareholder limit).
3. The entity has reasonable cause for the late filing. See the next section.
4. The request is filed within 3 years and 75 days of the requested effective date. Anything older requires a private letter ruling, which is a separate, more expensive process.
5. If the entity has filed any tax returns for the period, those returns must be consistent with S-Corp treatment. If you filed a Form 1120 (C-Corp return), for instance, you generally do not qualify and must file an amended return as part of the relief request.

What counts as "reasonable cause"

The IRS does not publish an exhaustive list, but accepted explanations historically include:

• The owner was unaware of the filing requirement.
• An accountant, attorney, or formation service was responsible for filing and failed to do so.
• Form 2553 was prepared and mailed but the IRS has no record of receiving it.
• A medical emergency, family emergency, or natural disaster prevented timely filing.
• The entity recently formed and the owner did not realize the 75-day clock had started.

Honesty matters more than eloquence. The reasonable-cause statement should be specific, dated, and signed under penalties of perjury. Vague language ("we forgot") is generally accepted, but a one-paragraph explanation that names dates and circumstances is stronger and faster to process.

How to file the late election

The mechanical steps are short:

1. Complete Form 2553 in full as if you were filing on time. Use the original intended effective date in line E.
2. At the top of the form, write "FILED PURSUANT TO REV. PROC. 2013-30" in bold capitals.
3. Complete Part IV. This is the late-election relief section. It contains representations the entity must agree to, plus space for the reasonable-cause explanation.
4. Have the reasonable-cause statement signed and dated by an authorized officer under penalties of perjury. Each shareholder must also sign a statement (often included in column K) confirming they reported income consistent with S-Corp treatment for any years already filed.
5. Mail or fax the package to the IRS service center for your state, listed in the Form 2553 instructions on irs.gov. Send by certified mail with return receipt or by fax with confirmation.

Filing it with — or after — your tax return

If you are filing late before the entity's first S-Corp tax return is due, send Form 2553 by itself. If the first S-Corp tax return (Form 1120-S) is also overdue, you can attach the late Form 2553 to a delinquent Form 1120-S; the IRS will process them together. If a return has already been filed inconsistently with S-Corp treatment, an amended return is generally required.

What happens after you file

The IRS typically processes late elections within 60–90 days. If the relief is approved, you will receive Notice CP261 or a similar acceptance letter showing the original requested effective date — meaning the entity is treated as an S-Corp from that date forward, just as if the form had been filed on time. If the IRS has questions, it will send a letter asking for additional information; respond promptly.

If you do not qualify for Rev. Proc. 2013-30

If your filing is more than 3 years and 75 days late, or if returns have been filed inconsistently and cannot be amended, the only remaining path is a private letter ruling requesting late-election relief. This is a formal, attorney-prepared submission with a substantial IRS user fee, and it should not be attempted without a tax professional. For most small businesses caught within the 3-year window, Rev. Proc. 2013-30 is faster, free, and sufficient.

How Entity IQ helps

Entity IQ generates a complete late-filing package — pre-filled Form 2553, the "FILED PURSUANT TO REV. PROC. 2013-30" header, a Part IV reasonable-cause statement built from your inputs, and the correct service-center mailing address for your state. The same flow handles timely elections; the system simply switches into late-election mode if the dates require it. To see how much an S-Corp election would save you for the year you are trying to recover, run the numbers in our S-Corp tax calculator, or read our companion guides on how to file Form 2553 and the S-Corp election deadline.

This article is for educational purposes only and is not legal or tax advice. Late-election relief depends on facts and circumstances that vary by entity. Please consult a qualified CPA or tax attorney before filing under Rev. Proc. 2013-30.