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§ LATE S-ELECTION RELIEF

BOCA RATON · UPDATED MAY 2026

Late S-Corporation Election Relief.

Missed the 75-day Form 2553 deadline? Under Rev. Proc. 2013-30 we file retroactively — up to 3 years and 75 days back — recovering $5,000 to $40,000 in self-employment tax for most owner-operators. Flat fee, specialist-handled, written eligibility analysis before you sign anything.

(561) 334-4066

In short

Late S-election relief uses Rev. Proc. 2013-30 to file Form 2553 retroactively, with a reasonable-cause statement, for entities that missed the normal 75-day window. Eligibility is broad — most LLCs and corporations that intended to be S-Corps qualify if the request is filed within 3 years and 75 days of the intended effective date. The IRS approves the vast majority of properly-filed requests. We handle the eligibility analysis, the reasonable-cause statement, Form 2553, and all amended returns end-to-end.

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§ 01

The deadline you missed

Form 2553 — the IRS election to be taxed as an S-Corporation — has to be filed within 75 days of one of two events: 75 days from the date the entity was formed (for new entities), or 75 days from the start of the tax year you want the election to apply to (for existing entities). Miss that window by even one day and the IRS defaults you back to whatever your prior tax treatment was — sole proprietorship on Schedule C for a single-member LLC, partnership on Form 1065 for a multi-member LLC, or C-Corporation on Form 1120 for a corporation. The 75-day rule is rigid on its face, but most owners we see never knew it existed. They formed an LLC online through LegalZoom or their state's portal, started invoicing clients, and filed a Schedule C the first April that came around — because nobody told them an S-election was a separate filing with its own deadline. By the time they hear about S-Corp savings from a peer or a podcast, the window has long since closed. The good news: the IRS knows this happens. There is a documented procedure for fixing it retroactively, and we file these every quarter.

§ 02

What Rev. Proc. 2013-30 actually allows

Revenue Procedure 2013-30 is the IRS's consolidated procedure for granting automatic late-election relief for S-Corps, ESBTs, QSSTs, and Qualified Subchapter S Subsidiaries. It replaced a patchwork of earlier procedures and is now the standard path. The retroactive window is up to 3 years and 75 days after the intended effective date of the election — so if you wanted to be an S-Corp for the 2023 tax year, you have until roughly March 15, 2027 to file under Rev. Proc. 2013-30 and recover that year. Four conditions must be satisfied. (a) The entity must have intended to be classified as an S-Corp as of the intended effective date — not as a tax-saving idea you came up with later. (b) The entity failed to qualify as an S-Corp solely because Form 2553 was not timely filed (not for any other disqualifying reason, like an ineligible shareholder). (c) There is reasonable cause for the failure to file timely and the entity has acted diligently to correct the mistake. (d) The entity and all shareholders sign penalty-of-perjury statements affirming the above and that they have reported all income consistent with S-Corp status for the years in question (or are concurrently amending returns to do so). Properly-filed requests under Rev. Proc. 2013-30 are routinely accepted by the IRS — the procedure is designed to be granted, not denied.

§ 03

The math — what you'd save (worked example)

Here is a representative scenario for a solo consultant who formed an LLC in 2022, never elected S-Corp, and has been filing Schedule C. Net self-employment income: $180,000 per year. On Schedule C, that income is subject to self-employment tax of roughly 15.3% on the first ~$168,600 (the 2024 Social Security wage base) plus 2.9% Medicare above that, plus the 0.9% Additional Medicare on income above $200,000 single. Total SE tax on $180K of Schedule C net income: approximately $25,400. Now run the same income through an S-Corp. Owner takes a reasonable W-2 salary of $80,000 — well-supported by BLS comparables for a solo consultant. Payroll FICA on $80K W-2 (employer + employee shares combined): approximately $12,240. The remaining $100,000 is taken as a distribution from the S-Corp, which is not subject to self-employment tax, FICA, or Medicare — it flows through on the K-1 and is taxed only as ordinary income on the 1040. Total payroll/SE tax: $12,240. Annual savings: approximately $13,160. Multiplied by up to 3 recoverable years under Rev. Proc. 2013-30: roughly $39,480. Example only. Actual savings depend on your specific facts — including reasonable-comp determination, state taxes, payroll setup costs, retirement-plan interactions, and §199A QBI changes. We run the real numbers on your books before you sign an engagement letter, not after.

§ 04

What we need from you

The intake is light by design — most of what we need already exists in your file. (1) Entity formation documents: Articles of Organization or Articles of Incorporation as filed with the state, the operating agreement or bylaws, and the IRS EIN assignment letter (CP-575 or 147C). These establish the entity's formation date and the date by which Form 2553 was originally due. (2) All filed tax returns for the years we will amend: federal 1040 with Schedule C (or 1065 partnership return) for each year of the requested retroactive window, plus the corresponding state returns. (3) Bank statements and bookkeeping: complete business bank statements for each retroactive year, and the books (QuickBooks file, spreadsheet, or whatever you used). We need a clean P&L for each year to compute the W-2 split and the amended 1120-S. If the books are not close-ready, we scope a separate bookkeeping cleanup before we touch the 2553. (4) A short written narrative — three to five sentences — of why the S-election was not made on time. Not a legal document; just the truth of what happened: you formed the LLC and didn't know about Form 2553, your prior preparer never raised it, the deadline passed before you understood S-Corps existed. We take that narrative and shape it into the reasonable-cause statement under Rev. Proc. 2013-30.

§ 05

What we file

A complete Rev. Proc. 2013-30 package has four moving pieces, and all of them have to align. (1) Form 2553, Election by a Small Business Corporation, with "FILED PURSUANT TO REV. PROC. 2013-30" written across the top, the reasonable-cause statement attached, and the penalty-of-perjury declarations signed by the entity and every shareholder. (2) Amended Form 1120-S for each retroactive year — these are the S-Corp returns that should have been filed at the time. Each return reports the year's income through the new W-2/distribution split, computes basis, and produces a K-1 for each shareholder. (3) Amended Schedule K-1 for each shareholder for each retroactive year, reflecting the new flow-through items and §199A QBI computation. (4) Amended Form 1040-X for each shareholder for each year, replacing the previously-filed Schedule C (or partnership K-1) with the new S-Corp K-1, recomputing the SE tax (down to zero on the distribution portion), and triggering the refund. The whole package is mailed — not e-filed — to the IRS service center designated for Rev. Proc. 2013-30 requests (currently Cincinnati or Ogden depending on the entity's state of formation). We track delivery via certified mail and follow up if no acceptance letter arrives within the expected window.

§ 06

Timeline

Total engagement-to-refund window is typically 6 to 9 months. Phase 1 — engagement to submission: 30 to 45 days. We need 30-min eligibility call, document intake, books review, reasonable-cause draft, your review, Form 2553 and amended-return preparation, signatures, and certified-mail submission. Phase 2 — IRS acceptance: typically 60 to 120 days after the IRS receives the package. The acceptance arrives as a CP-261 notice ("We have accepted your S-Corporation election") mailed to the entity's address of record. The CP-261 confirms the effective date of the S-election — which should match the date you requested. If the effective date on the CP-261 is wrong, we respond in writing to correct it. Phase 3 — refunds from amended 1040s: 3 to 6 months after the IRS finishes processing the amendments. The amended 1040-X refunds are processed separately from the 2553 acceptance and often arrive in a different order than the years were filed — that is normal. We monitor IRS account transcripts via Tax Pro Account through the engagement so we know when each refund posts and can flag anything that looks like an examination start instead of an acceptance.

§ 07

If Rev. Proc. 2013-30 doesn't apply

A small fraction of late-election cases fall outside the Rev. Proc. 2013-30 automatic window — usually because more than 3 years and 75 days have passed since the intended effective date, or because one of the four eligibility conditions is not cleanly satisfied (for example, the entity had an ineligible shareholder during part of the requested period, then converted to all-eligible shareholders later). In those situations the only remaining path is a Private Letter Ruling under IRC §1362(b)(5), requested through the IRS Office of Chief Counsel under the procedures in Rev. Proc. 2025-1 (and its successors). The user fee depends on the taxpayer's gross income tier — currently $3,000 for taxpayers with gross income under $250K, $8,500 between $250K and $1M, and approximately $12,600 for taxpayers above $1M. PLRs are drafted by tax attorneys — the substantive legal argument under §1362(b)(5) goes beyond the scope of a tax-preparation engagement. If your case requires a PLR, we refer you to a tax attorney we trust, coordinate the factual record, and prepare the supporting return work — but the PLR itself is out of our scope.

§ Pricing

Flat fees. No hourly surprises.

Flat fees quoted in writing after the 30-minute eligibility call. We do not start the engagement until you have a written quote and you have signed.

  • Late S-election filing — 1 year back

    Single shareholder, one year

    $1,500 flat

  • Each additional year amended

    Per recovered year (2nd and 3rd year)

    $750/year

  • Each additional shareholder

    Multi-shareholder S-Corps

    $450 each

  • PLR coordination (if Rev. Proc. fails)

    Out-of-scope cases requiring §1362(b)(5) ruling

    $1,000 flat + tax attorney fees passed through

IRS PLR user fees are charged directly by the IRS and vary by gross-income tier (currently $3,000 / $8,500 / $12,600 per Rev. Proc. 2025-1). Bookkeeping cleanup, retroactive payroll filings, and state-level entity amendments are scoped separately if needed.

§ Scope

What's included — and what isn't.

No surprises mid-engagement. Here's exactly what's in the standard scope, and what we'd bill separately or refer out.

Included

  • — Eligibility analysis under Rev. Proc. 2013-30 (30-min call, no charge)
  • — Reasonable-cause statement drafted from your narrative
  • — Form 2553 preparation with all required penalty-of-perjury statements
  • — Amended Form 1120-S for each retroactive year
  • — Amended Schedule K-1 issued to each shareholder for each year
  • — Amended Form 1040-X for each shareholder for each year
  • — Certified-mail submission and IRS follow-up correspondence
  • — Monitoring of IRS account transcripts until CP-261 acceptance and amendment processing

Outside our scope

  • — IRS examination defense if the request is rejected and proceeds to examination — outside our practice scope; referred to a licensed IRS-representation firm if needed
  • — Bookkeeping cleanup for retroactive years — scoped separately if the books are not close-ready
  • — State-level entity conversions or amended state corporate returns (quoted per state)
  • — Future-year S-Corp engagement (1120-S, K-1, reasonable-comp memo, basis) — handled under S-Corporation Tax
  • — Private Letter Ruling drafting under §1362(b)(5) — referred to tax attorney
  • — Retroactive payroll filings (W-2s, 941s) if not previously filed — scoped separately

§ How this engagement works

The path from first call to delivered work.

  1. § 01

    Eligibility analysis

    A 30-minute call at no charge. We confirm the intended effective date, count back the 3-year-and-75-day window, identify any disqualifying facts, and tell you in writing which years are reachable and what the rough savings look like.

    30 min · no charge

  2. § 02

    Engagement letter + flat-fee deposit

    Written quote based on number of retroactive years and shareholders. Engagement letter signed; flat-fee deposit collected before any work begins.

    Day 1

  3. § 03

    Document intake

    Formation docs, EIN letter, prior-year 1040s with Schedule C (or 1065s), business bank statements and bookkeeping for each retroactive year, three-to-five-sentence narrative of why the election was late.

    Week 1

  4. § 04

    Reasonable-cause statement draft + review

    We draft the statement from your narrative under the four §4.03 conditions of Rev. Proc. 2013-30. You review and approve before we attach it to Form 2553.

    Week 2

  5. § 05

    Form 2553 + amended returns prepared

    Form 2553 with the reasonable-cause statement on top. Amended 1120-S for each retroactive year, amended K-1s, amended 1040-X for each shareholder for each year. You review the full package before signing.

    Week 3-5

  6. § 06

    Client signs; we file by mail

    Penalty-of-perjury declarations signed by the entity and every shareholder. We mail the complete package by certified mail to the appropriate IRS service center and provide tracking.

    Week 5-6

  7. § 07

    Monitor for CP-261; manage IRS follow-up

    We monitor IRS account transcripts for the CP-261 acceptance notice (typically 60-120 days) and for amended-return processing (3-6 months for the refunds). We handle any IRS correspondence that comes back and confirm the effective date on the CP-261 is correct.

    Month 2-9

Rev. Proc. 2013-30 is the IRS saying: we'd rather you elect S-Corp than not. Most preparers don't know the procedure exists. We file these every quarter.

— KDM Accounting

§ FAQ

Questions we hear about late s-election relief.

What if my LLC was formed years ago — am I still eligible?

It depends on which year you want the S-election to take effect, not how long ago the LLC was formed. Rev. Proc. 2013-30 gives you up to 3 years and 75 days from the intended effective date of the election. So an LLC formed in 2015 can still elect S-Corp treatment retroactively to, say, January 1, 2023 — that is well within the 3-year window — and we can amend 2023 and any later years. We cannot reach back to 2015, 2016, or 2017 under the automatic procedure; those would require a Private Letter Ruling under §1362(b)(5), which is a separate (and more expensive) path. The eligibility call is 30 minutes at no charge, and we tell you in writing which years are reachable before you sign anything.

Can I do this myself with TurboTax?

No — TurboTax does not file Form 2553 at all, and it does not file amended business returns (1120-S, 1120-X). The Rev. Proc. 2013-30 package requires a paper-mailed Form 2553 with a reasonable-cause statement, amended 1120-S returns for each retroactive year, amended K-1s issued to each shareholder, and amended 1040-X returns for each shareholder for each year. The pieces interlock — the SE tax on the 1040-X has to reconcile to the W-2/distribution split on the 1120-S, the K-1 has to match the amended 1040, and the reasonable-cause statement has to satisfy the four Rev. Proc. 2013-30 conditions. Consumer tax software does not do any of that. The IRS rejects incomplete or incorrectly-structured 2553 packages, and rejection is harder to fix than a clean first filing.

What if I already filed Schedule C for the years I'm amending?

That is the normal starting point — virtually every Rev. Proc. 2013-30 client has filed Schedule C (or a partnership return) for the years they want to recover. The amendment process undoes the Schedule C and replaces it with the K-1 flow-through from an amended 1120-S. Mechanically: we prepare an amended 1120-S for each retroactive year as if the S-election had been in place from day one, issue an amended K-1 to each shareholder, then prepare a Form 1040-X for each shareholder for each year that removes Schedule C, attaches the new K-1 on Schedule E Part II, recomputes self-employment tax (which drops on the distribution portion), and triggers the refund. The penalty-of-perjury statement signed with the 2553 explicitly affirms that all income is being reported consistently with S-Corp status going forward, which is what the amendments accomplish.

How sure are you the IRS will approve?

Properly-filed Rev. Proc. 2013-30 requests are routinely accepted — the procedure was specifically designed by the IRS to be granted, not denied, because the alternative (litigation over a missed administrative deadline) is bad for everyone. That said, "properly filed" is doing a lot of work in that sentence. The four conditions under §4.03 of the procedure all have to be cleanly satisfied: intent to be an S-Corp from the effective date, failure caused solely by the untimely 2553, reasonable cause for the late filing, and complete penalty-of-perjury declarations. Where requests get rejected, it is almost always because one of those four pieces was missing or contradicted by the record (for example, the books show partnership-style allocations inconsistent with S-Corp distributions). We do the eligibility analysis before we file precisely to surface those issues — and we will tell you in writing if the case has weaknesses, before you spend a dollar.

Will I have to pay back the SE tax I already paid?

No — you recover SE tax you previously paid. That is the whole point of the amendments. When you filed Schedule C, you paid self-employment tax (roughly 15.3% on the first ~$168K and 2.9-3.8% above) on 100% of net income. After we amend, your income for those years splits into a W-2 portion (which carries FICA, but at a lower base) and a distribution portion (which carries no SE tax at all). The amended 1040-X for each year reflects the new — lower — total of payroll and SE tax, and the IRS refunds the difference. The W-2 piece does require us to file W-2s and 941s for those retroactive years, which the IRS treats as a separate compliance item, and there can be small penalty-and-interest adjustments on the payroll side. The net of all of it is still a substantial refund — the worked example above lands around $13,160 per recovered year for a $180K Schedule C filer.

What's a "reasonable cause" for being late?

Rev. Proc. 2013-30 does not require a heroic story — the IRS accepts ordinary reasonable causes that map to how small-business owners actually behave. The most common (and successful) narratives we draft fall into a few buckets. (1) You did not know the election existed — formed the LLC yourself or through an online service, never received tax advice that mentioned Form 2553, only learned about S-Corps later from a peer or a new preparer. (2) You relied on a professional who did not advise on the election — your prior CPA, attorney, or preparer never raised S-Corp status, or said they would file the election and did not. (3) You filed it yourself and made a clerical error — wrong form, wrong year, mailed to the wrong service center, signature missing. The reasonable-cause statement has to be specific, signed under penalty of perjury, and consistent with what the rest of the file shows. We draft it from your three-to-five-sentence narrative and walk you through it before you sign.

§ Related services

Often paired with late s-election relief.

§ S-Corporation Tax

S-Corporation tax as a specialty — Form 1120-S, K-1 issuance, annual reasonable-compensation memo, and maintained basis schedule. Single-shareholder bundle (corp + personal 1040) from $950.

See more

§ Tax Preparation

Tax preparation for individuals and businesses in Boca Raton and Fort Lauderdale. Federal and state returns, IRS e-file, year-round support.

See more

§ Tax Planning

Year-round tax planning for individuals and business owners in South Florida. Strategies that actually reduce what you pay — legally.

See more

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