Late S Corp Election Relief: What Rev. Proc. 2013-30 Allows

Late S Corp Election Relief: What Rev. Proc. 2013-30 Allows

You formed the company, paid yourself a salary, took distributions the way an S corporation owner would, and told everyone you were an S corp. Then a CPA asks for your IRS acceptance letter and you realize nobody ever filed Form 2553. Late S corp election relief exists for exactly that day.

The short answer: Revenue Procedure 2013-30 gives eligible corporations a simplified way to ask the IRS to treat a late election as timely, without a private letter ruling and its user fee. The main condition is time. You generally have three years and 75 days from the date the election was meant to take effect.

A firm that works with startups and small business owners on monthly accounting and tax, Iota Finance, is covered at the end. Iota Finance is a paid featured member of Sam's List.

Why the Form 2553 Deadline Gets Missed

The deadline is short and easy to overlook. A corporation generally elects S status by filing Form 2553 no more than two months and 15 days after the beginning of the tax year the election is to take effect, or at any time during the tax year before it. For a new company, the first tax year can begin on the day it has shareholders, acquires assets or starts doing business, which may be earlier than the day you formed it on paper.

That is how it slips. The lawyer forms the entity, the bookkeeper starts the books, the owner assumes the formation package covered the election, and the first return is prepared months later by a CPA who finds the gap.

The limitation: until the election is accepted or relief is granted, a state-law corporation is taxed as a C corporation, regardless of how you have been paying yourself. (An LLC that never elected is taxed as a partnership or sole proprietorship by default.) That affects the return, the owner's salary and distribution treatment, and any estimated payments.

The Conditions for Late S Corp Election Relief Under Rev. Proc. 2013-30

The revenue procedure lists conditions, and all of them have to be met. In plain terms:

The company intended to be an S corporation. On the date the election was supposed to take effect, the company meant to be taxed as an S corporation, and it was eligible: a domestic corporation, no more than 100 shareholders, one class of stock, and only permitted shareholders.

It missed the deadline for one reason. The failure to qualify must be solely because the Form 2553 was not filed on time.

There is reasonable cause. The company has to explain why the election was late, and the explanation has to be honest and specific. "We did not know" is a weaker statement than "our adviser told us the formation filing covered it."

The timing works. The request generally has to be made within three years and 75 days after the effective date the company wants. The revenue procedure also has a narrower path in some cases for companies that have been filing as an S corporation all along, so the limit is not absolute for everyone. Whether that path applies is a question for a tax professional, not a guess.

Everyone reported consistently. The company and its shareholders generally must have filed their returns as though the company was an S corporation for the period involved.

The limitation: the conditions are cumulative, and missing one means this simplified route is closed. A company that never filed returns, or filed Form 1120 as a C corporation in a way inconsistent with S status, may fail the consistency condition. That is a reason to talk to a professional before using the revenue procedure.

How to Request a Form 2553 Late Election

The mechanics are specific, and getting them wrong delays the answer.

The company completes Form 2553 and writes "FILED PURSUANT TO REV. PROC. 2013-30" at the top. It attaches a statement of reasonable cause, and statements from every shareholder who held stock during the period between the intended effective date and the date of filing, confirming that their returns were reported consistently with S status. The package is sent to the IRS service center where the company would file its return.

If the election is accepted, the IRS sends an acceptance letter, and that letter is the document your CPA has been asking for. Keep it with the corporate records.

The limitation: the IRS processes these on its own timetable, which can take months. In the meantime, the return is often prepared or extended with the late election pending, and that sequencing is a conversation to have with your preparer before the filing deadline, not after it.

What an S Corp Effective Date Means for Your Returns

If relief is granted, the S corporation election takes effect on the date you asked for, as though it had been timely. That is the S corp effective date, and it governs which years are S corporation years.

In practice it means the company files Form 1120-S, not Form 1120, for those years, and owners receive Schedules K-1. If a return was filed consistently with S status but on the wrong form, it has to be corrected. Salary and distributions are then viewed through S corporation rules, which expect a reasonable salary for services before distributions.

The limitation: late relief fixes the classification going forward and backward to the effective date. It does not erase mistakes made in how you paid yourself during the gap. If distributions were taken with no salary, that exposure still has to be dealt with.

What Late S Corp Election Relief Does Not Fix

Relief is narrower than owners hope.

It does not help a company that was ineligible. An entity with a second class of stock, a non-qualifying shareholder or too many shareholders was not an S corporation candidate on the date in question, and no filing changes that.

It does not remove penalties for returns filed on the wrong form, though reasonable cause can support a request to abate them. It does not decide state treatment, because states have their own S corporation rules and elections, and some require a separate filing.

And it does not apply if the three years and 75 days have passed and no other path fits.

The limitation: the cost of getting this wrong is a corporate-level tax on years you assumed were pass-through. That cost is much larger than the cost of asking a tax professional first.

When a Private Letter Ruling Is the Only Route

If the company does not meet the revenue procedure, the fallback is a private letter ruling. The tax code allows the IRS to treat a late S election as timely when there was reasonable cause and the government's interests are not jeopardized, and the request is made to the IRS in a ruling request with a user fee.

It is slower and more expensive than the simplified route, and the outcome is less predictable. For many owners it is still worth it, because the alternative is C corporation treatment for a closed or open year that was meant to be pass-through.

The limitation: a ruling request needs a detailed fact statement and a representation from the owners under penalty of perjury. It is a legal and tax project, not a form.

Where Iota Finance Fits

Iota Finance is a Florida-based accounting firm founded in 2022, with 7 employees, led by Igor Tutelman, CPA, as Managing Partner. It provides monthly accounting, tax and fractional CFO services for small businesses, startups and entrepreneurs, serves clients nationwide, and lists minimums of $200,000 income, $500,000 revenue or $500,000 raised.

Late-election relief rests on records: when the company started, who owned it, how returns were reported and what the owners were told. A firm that keeps monthly books and prepares the tax return is positioned to assemble that timeline.

Iota Finance has 14 verified client reviews on Sam's List as of 2026-10-02. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Iota Finance is a paid Sam's List member. Ratings and rankings are not indicative of future performance or results.

The limitation, plainly: a seven-person firm founded in 2022 has finite capacity and a short track record, and its listed minimums put smaller companies outside its scope. Ask whether ruling requests are in scope and whether tax counsel would be brought in.

Frequently Asked Questions

Can I file Form 2553 late?

Yes, in many cases. Rev. Proc. 2013-30 lets an eligible corporation request late S election relief, generally within three years and 75 days of the intended effective date. You must show reasonable cause and that you reported consistently as an S corporation. Confirm eligibility with a tax professional.

What happens if I never filed Form 2553?

A corporation is taxed as a C corporation, even if you have behaved like an S corporation owner. An LLC that never elected defaults to partnership or sole proprietor treatment. Relief is possible if the conditions are met. If they are not, a private letter ruling may be the only way to be treated as an S corporation for the missed years.

How long does late S corp election relief take?

The IRS decides on its own timeline, and processing can take months. Many filers prepare their returns as S corporation returns, or file for an extension, while the request is pending. Ask your tax professional how to sequence the return and the request.

Does the late election date matter for state tax?

Yes. Federal relief does not decide your state's treatment. Some states recognize the federal election automatically and others require their own filing or have their own rules. Check your state's requirements separately.

If you have been acting like an S corporation without an IRS acceptance letter, ask your CPA to find the date the election should have taken effect, then count three years and 75 days from it. You can browse accountants on Sam's List, including the firm above.

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About the author: Kimberly Green is cofounder of Sam’s List, a directory and matching platform for financial professionals.