Late S Corporation Election Relief: Rev. Proc. 2013-30 and PLRs

If you missed the deadline to elect S corporation status, you can usually fix it by filing Form 2553 under Revenue Procedure 2013-30. This is late S corporation election relief: a simplified, no-fee process that lets you request retroactive treatment as long as you file within three years and 75 days of the effective date you want, had reasonable cause for the delay, and have been reporting income all along as though the election were already in place.¹ The normal statutory window is narrow — the first two months and 15 days of the tax year, or any time in the preceding tax year — but missing it does not lock you into C corporation taxation.²

Who Qualifies Under Revenue Procedure 2013-30

Rev. Proc. 2013-30 consolidated several older relief procedures into a single track and charges no user fee.³ To use it, the business must meet all of the following:

The entity intended to be classified as an S corporation from the requested effective date.
The only reason it failed to qualify is that Form 2553 was not filed on time. The business would otherwise have been an eligible S corporation under IRC §1361 for the entire period.⁴
The late filing happened despite ordinary business care and prudence, not willful neglect.
The corporation and every shareholder reported income on all federal returns as though the S election was already in effect, for every year from the intended effective date forward.
The request is submitted no later than three years and 75 days after the intended effective date.

The consistency requirement is where most requests fail. If the corporation filed a Form 1120 (C corporation return) instead of Form 1120-S for any affected year, or if any shareholder left pass-through income off a personal return, the IRS will deny relief. Every return, corporate and individual, has to match S corporation treatment.

What Counts as Reasonable Cause

The reasonable cause statement is your written explanation of why the deadline was missed. Vague excuses do not work. The IRS expects specific facts: what happened, when it happened, and how it kept the election from being filed. A serious illness that incapacitated the person responsible for corporate filings, or a natural disaster that destroyed records, are the kinds of facts that carry weight.

Many owners want to blame their accountant or attorney. The IRS’s general position is that taxpayers are responsible for meeting their own filing obligations even when they hire a professional.⁵ In practice, a detailed account showing that you retained a qualified professional, specifically instructed them to make the S election, and had no reason to know they failed can still succeed for late election relief. “My CPA forgot,” without more, is thin. Document the engagement, the instructions you gave, and when you discovered the error.

How to Prepare and Submit the Filing

The whole request is built around Form 2553, Election by a Small Business Corporation.⁶ Fill it out with the corporation’s legal name, EIN, state of incorporation, date of incorporation, and the date the business first had shareholders, held assets, or began operating. The effective date you enter is the date you want the S election to start.

Three things distinguish a late relief filing from an ordinary one:

The notation. Write or type “FILED PURSUANT TO REV. PROC. 2013-30” at the top of the first page of Form 2553. Without it, the form can be rejected as untimely rather than routed for relief review.³

The reasonable cause statement. Attach the written explanation described above. An officer authorized to sign for the corporation must sign it under penalties of perjury.

Shareholder signatures. Every person who held shares at any point from the intended effective date through the filing date must sign the form, providing their Social Security number, share count, and acquisition date.⁷ If a shareholder lives in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), the shareholder’s spouse may also need to sign if they have a community interest in the stock or its income. If a shareholder died during the retroactive period, the executor or administrator of the estate signs in their place.

If the corporation has not yet filed Form 1120-S for the year the election should have started, you can attach the Form 2553 relief request to the late-filed 1120-S. File all delinquent 1120-S returns for subsequent years at the same time, each consistent with S corporation treatment. A single package is easier for the IRS to process than pieces arriving separately.

LLCs That Missed Both Elections

An LLC that wants S corporation treatment actually needs two elections: classification as a corporation (Form 8832), and then S status (Form 2553). If you missed both, Rev. Proc. 2013-30 lets you request relief for both at once, as long as you intended both to take effect on the same date.³

You file only Form 2553 for this dual relief; no separate Form 8832 is needed. The form must include additional representations signed under penalties of perjury: that the entity is eligible under the check-the-box regulations, that it intended to be classified as a corporation from the effective date, and that it failed to qualify solely because neither form was filed on time. The three-year-and-75-day deadline and consistent-reporting requirement apply the same way.

What Happens After You File

The IRS generally issues a determination within 60 days of receiving Form 2553. If you request a special tax year (box Q1 in Part II), add roughly 90 days for a separate ruling letter. If you have heard nothing after two months (five months for a special tax year), call 1-800-829-4933 to follow up.⁷

A successful application produces a CP261 notice confirming acceptance and stating the effective date. Keep it permanently; it is your proof of S corporation status.⁸ An incomplete submission draws a letter asking for what is missing, usually signatures or shareholder details. A denial leaves the entity as a C corporation, meaning tax at the flat 21 percent federal rate and no pass-through to shareholders for those years.

Missed the Three-Year Window

Being past the three-year-and-75-day deadline does not automatically push you into a private letter ruling. Section 5.04 of Rev. Proc. 2013-30 offers an alternative with no time limit, but stricter conditions:³

The only reason the corporation failed to qualify is the late Form 2553.
The corporation and all shareholders reported income consistently with S status for the first affected year and every year after.
At least six months have passed since the corporation filed its return for the first year it intended to be an S corporation.
Neither the corporation nor any shareholder received an IRS notice about problems with the S corporation status within six months of timely filing the first-year Form 1120-S.
The corporation is not simultaneously requesting relief for a missed entity classification election. The dual LLC pathway is not available under this section.

Section 5.04 is designed for businesses that operated as an S corporation for years, filed consistently, and only later realized the original election was never made. Use the same “FILED PURSUANT TO REV. PROC. 2013-30” notation on the Form 2553.

When Only a Private Letter Ruling Will Do

If your facts do not fit any section of Rev. Proc. 2013-30, the remaining option is a private letter ruling from the IRS National Office asking the IRS to exercise its authority under IRC §1362(b)(5) or §1362(f) to treat the election as timely or to correct an inadvertent termination.¹

Procedural requirements are set out in Revenue Procedure 2026-1, and the process is considerably more involved. Legal counsel experienced in IRS ruling requests is essentially required. Unlike the simplified procedure, PLRs carry a user fee that can run into the thousands depending on gross income, and processing often takes several months.⁹ This is a last resort, but it exists for genuinely unusual situations.

Late Filing Penalties for the Back Returns

Getting the election approved retroactively is only part of the job. Any Form 1120-S returns that were never filed are now delinquent. For returns required to be filed in 2026, the penalty is $255 per shareholder for each month or partial month the return is late, up to 12 months.¹⁰ A five-owner S corporation that files 10 months late faces $12,750 in penalties for a single year. Returns more than 60 days late carry a minimum penalty of $525 or the tax due, whichever is less. Multiple back years multiply the problem quickly.

Two forms of relief can reduce or eliminate these penalties. First-time abatement is available if the corporation filed all required returns on time and was not assessed penalties in the prior three tax years; it requires no detailed explanation and is the fastest route.¹¹ A newly formed S corporation with no prior history may qualify on its first delinquent return.

When first-time abatement is not available, you can request reasonable cause abatement with a written explanation supported by documentation. Serious illness, natural disasters, inability to obtain records, and electronic filing system issues are commonly accepted reasons. Request it by phone using the number on the penalty notice, or in writing using Form 843.⁵

State Elections Are Separate

Federal approval does not settle state tax status. Most states follow the federal election automatically, but some do not. New York, for example, has long required its own S corporation election filing. A few jurisdictions impose entity-level taxes on S corporations regardless of pass-through status, and state late filings carry their own penalties. If the business operates in more than one state, check each state’s rules with its department of revenue before assuming the federal fix is enough.

1
Internal Revenue Service. Late Election Relief
2
Office of the Law Revision Counsel. 26 U.S.C. 1362 – Election; Revocation; Termination
3
Internal Revenue Service. Revenue Procedure 2013-30
4
Office of the Law Revision Counsel. 26 U.S.C. 1361 – S Corporation Defined
5
Internal Revenue Service. Penalty Relief for Reasonable Cause
6
Internal Revenue Service. About Form 2553, Election by a Small Business Corporation
7
Internal Revenue Service. Instructions for Form 2553
8
Internal Revenue Service. Understanding Your CP261 Notice
9
Internal Revenue Service. Internal Revenue Bulletin 2026-1
10
Internal Revenue Service. Instructions for Form 1120-S
11
Internal Revenue Service. Administrative Penalty Relief