Submitting S Corp Election To The IRS
Tactics to keep in mind...
In this audio snippet, you'll hear about:
- Immediately fax over to the IRS and send mail S election just to be sure that they get it
- Often the IRS will fail to process it. 1 1/2 years letter, the IRS will ask you why you're filing S Corp taxes when you never filed an S Corp election.
Audio Transcript
Yosef:
Frequently when I set up a new corporation I will
immediately fax over the Sub–S election to the IRS. You can actually fax or mail it in. I
actually do both and I probably shouldn't.
If anyone at the IRS actually knew I did both they'd probably be pretty mad.
Travis:
[laughter]
Yosef:
But I try to fax over an S election as well as mail one in just to make sure.
Travis:
Just to be sure.
Yosef:
The problem though is and this is what I think is worthwhile to
consider is that often even if you fax and mail it in, the IRS may
still fail to process it. Then what will happen is a year and a half
later when filing your S corp tax return, you'll get a nice letter from
the IRS saying: "Hey what are you doing, why are you filing an S corp.
tax return? You never did an S election."
There's
actually something called late relief that provides S corporations the
ability to make the S election later on as long as they've fulfilled
certain conditions.
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