Many small businesses discover—sometimes years after formation—that they failed to file Form 2553 in time to be treated as an S corporation. Missing the deadline can introduce costly tax consequences. Fortunately, IRS Revenue Procedure 201330 offers a streamlined process for obtaining relief when Form 2553 was filed late, without requiring a private letter ruling.

Who Qualifies for Relief

Relief under Revenue Procedure 201330 is available if the following conditions are met:

1. The corporation (or eligible entity) intended to be an S corporation as of the effective date on Form 2553 and failed to qualify only because the form wasn’t filed timely.
2. The corporation and all its shareholders reported income consistently with S corporation status for the year the election should have been made—and all subsequent years.
3. The late Form 2553 is filed within 3 years and 75 days of the desired effective date.

Special Exception Beyond 3 Years and 75 Days

If the late election is filed after that window, relief may still be available without time limit, provided the following are true:

• The corporation isn’t also seeking a late entity classification election.
• The corporation and shareholders reported income as an S corporation for the intended year and beyond.
• At least six months have passed since the first S-year return was filed.
• Neither the corporation nor any shareholder received IRS notification of an issue within six months after that return.
• The completed Form 2553 includes a shareholder consent statement confirming consistent reporting.

This exception often applies when the issue is discovered during an audit, a sale, or internal review.

How to Request Relief

To submit a late S election under Revenue Procedure 201330:

• Complete Form 2553.
• Include a reasonable-cause statement signed under penalties of perjury explaining the delay and corrective actions taken.
• Obtain and attach shareholder consents (via Part I, Column K or separate statements).
• Clearly label the filing. On Form 2553, write “FILED PURSUANT TO REV. PROC. 201330” at the top. If attaching to Form 1120S, label the return’s top with “INCLUDES LATE ELECTION(S) FILED PURSUANT TO REV. PROC. 201330.”

When Relief Isn’t Available

If eligibility under Revenue Procedure 201330 cannot be met—such as inconsistent reporting or missed deadlines—the corporation may still seek relief via a private letter ruling under IRC § 1362(b)(5) or § 1362(f). However, this route is more burdensome, requiring a formal submission and often substantial IRS fees.

Practical Takeaways for Clients

Many businesses only realize a missed S election later—during an audit, transaction, or internal cleanup. In most cases, relief is available if:

• Returns were filed consistently with an S election.
• Reasonable cause is documented.
• Action was taken promptly once the issue was discovered.

Acting quickly helps preserve eligibility for the streamlined, no-fee relief under Revenue Procedure 201330 and helps avoid costly IRS rulings.

Need Help Filing for Late S Election Relief?

At Coepio Legal, we assist closely held businesses and their advisors in identifying and correcting missed S corporation elections. If your entity may qualify for relief, we can help assess eligibility, prepare the necessary filings, and reduce risk moving forward.