Where to Fax Form 2553 (IRS S-Corp Election)

Form 2553, "Election by a Small Business Corporation," is how an eligible domestic corporation — or an LLC that has elected to be taxed as a corporation — asks the IRS to be treated as an S corporation. An S corporation is a pass-through entity: instead of paying corporate income tax at the entity level, profits, losses, deductions, and credits flow through to the shareholders’ personal returns, which avoids the "double taxation" of a C corporation and can reduce self-employment tax for active owners.

To make the election, the business must meet every S-corporation eligibility test: it must be a domestic entity, have no more than 100 shareholders, have only allowable shareholders (individuals, certain trusts, and estates — not partnerships, corporations, or non-resident aliens), have only one class of stock, and not be an ineligible corporation (such as certain financial institutions or insurance companies). An LLC that wants S-corp treatment can file Form 2553 by itself; the IRS treats a timely Form 2553 as also making the Form 8832 entity classification election, so a separate Form 8832 is usually not required.

Timing is the single most important thing about Form 2553. To have S-corp status apply to a given tax year, you must file no later than two months and 15 days after the beginning of the tax year the election is to take effect. For a calendar-year business whose tax year begins January 1, that deadline is March 15. You can also file at any time during the tax year that precedes the year the election takes effect.

A brand-new corporation’s two-month-and-15-day clock starts on the earliest of the date it first had shareholders, first had assets, or first began doing business — not the date on the state incorporation certificate. Misreading that start date is a very common reason elections are filed late.

If you miss the deadline, all is not lost. Revenue Procedure 2013-30 provides simplified late-election relief: if you had reasonable cause for filing late, have otherwise acted as an S corporation, and are within roughly three years and 75 days of the intended effective date, you can request relief on the same Form 2553 by writing "FILED PURSUANT TO REV. PROC. 2013-30" across the top and attaching a reasonable-cause statement. Many late S-corp elections are accepted this way without a private letter ruling.

The IRS processes Form 2553 at two campuses — Kansas City, Missouri and Ogden, Utah — and each one handles a fixed list of states. Which campus is yours is based on the state where the corporation’s principal business, office, or agency is located, not where the owners live or where the entity was originally formed. Faxing to the wrong campus can bounce the election back or delay it, so confirm your state in the table before you send.

Fax is generally faster than mail for this form and gives you a transmission confirmation you can keep with your records. Mailing is still accepted at the same campus if you prefer a paper trail through the Postal Service.