Question

What are the IRS provisions for the election and revocation of an S corporation – Status? -

Answer 1

To revoke a Sub chapter S election/small business election that was made on Form 2553, submit a statement of revocation to the service center where you file your annual return.

The statement should state:

• The corporation revokes the election made under Section 1362(a)
• Name of the shareholder(s),
• Address of the shareholder(s),
• Taxpayer identification number of the shareholder(s),
• The number of shares of stock owned by the shareholder(s),
• The date (or dates) on which the stock was acquired
• The date on which the shareholder's taxable year ends
• The name of the S corporation
• The S corporation's EIN
• The election to which the shareholder(s) revokes
• The statement must be signed by the shareholder(s) under penalties of perjury
• Signature and consent of shareholder(s) who collectively own more than 50% of the number of issued and outstanding stock of the corporation, (whether voting or non-voting)
• Indication of the effective date of the revocation (or prospective date)
• Signature of person authorized to sign return

Due Date of Revocation:

• If revoking effective the first day of the tax year, the revocation is due by the 16th day of the third month of the tax year,
• If revoking effective any day other than the first day of the tax year, the revocation must be received by IRS by the requested effective date.
  • For example, the S corporation is on a December 31 tax year ending and requests a revocation effective Jan. 1st, the revocation is due March 15th.
  • The S corporation is on a December 31 tax year ending and requests a revocation effective Feb. 14th, the revocation is due Feb. 14th.