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Legal Entity Tax Strategy: Late S Elections
A C-Corporation structure may be more beneficial
The IRS will facilitate the grant of relief to late-filing entities by consolidating many other revenue procedures into one revenue procedure and increasing relief in certain circumstances. This provides relief guidance for the following late elections:
- S corporation
- Electing Small Business Trust (ESBT)
- Qualified Subchapter S Subsidiary (QSub)
- Qualified Subchapter S Trust (QSST)
- Corporate classification
Under the revenue procedure, the relief is granted when the entity cannot qualify solely because it failed to timely file the election under Subchapter S with the applicable IRS Campus and all returns reported consistent income, as if the election was in effect.
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