Rev. Proc. 2013-30 - Late S corporation election guidance reorganized, consolidated 

August 14: The IRS today released an advance copy of Rev. Proc. 2013-30 that reorganizes, and consolidates into one document, multiple prior revenue procedures concerning S corporation elections.

Today’s revenue procedure provides guidance to be used in lieu of the letter ruling process in requesting relief from certain late elections (including late S corporation elections).


Rev. Proc. 2013-30 [PDF 105 KB] also extends relief when the taxpayer satisfies certain general and specific requirements of today’s revenue procedure.


Rev. Proc. 2013-30 provides a flowchart to aid taxpayers in applying this guidance.

Overview

Today’s revenue procedure modifies and supersedes prior revenue procedures—Rev. Proc. 2003-43, Rev. Proc. 2004-48, and Rev. Proc. 2007-62—concerning the following late elections:


  • Late S corporation elections
  • Late Electing Small Business Trust (ESBT) elections
  • Late Qualified Subchapter S Trust (QSST) elections
  • Late Qualified Subchapter S Subsidiary (QSUB) elections
  • Late corporate classification elections that the taxpayer intended to take effect on the same date that the taxpayer intended that an S corporation election for the entity was to be effective

Today’s revenue procedure incorporates certain relief provisions included in Rev. Proc. 97-48 and supersedes the relief provided in Situation 1 of Rev. Proc. 97-48. The relief provided in Situation 2 of Rev. Proc. 97-48 is rendered obsolete because it is no longer available.


Today’s revenue procedure further:


  • Incorporates relief provisions included in Rev. Proc. 2004-49
  • Modifies and supersedes the relief provided in sections 4.01 and 4.02 of Rev. Proc. 2004-49
  • Obsoletes the relief provided in section 4.03 of Rev. Proc. 2004-49 because the time period for its narrow scope of relief has expired

Lastly, Rev. Proc. 2013-30 provides the exclusive “simplified methods” for taxpayers to request relief for late S corporation elections, ESBT elections, QSST elections, QSUB elections, and late corporate classification elections thaT the taxpayer intended to take effect on the same date that the taxpayer intended that an S corporation election for the entity would take effect.


Because the “simplified method” procedures contained in Rev. Proc. 2013-30 are in lieu of the letter ruling process (which taxpayers ordinarily use to obtain relief for late elections under subchapter S), IRS user fees do not apply to corrective actions under this revenue procedure.


However, taxpayers that do not satisfy the requirements for relief or that are denied relief under this revenue procedure may seek relief by requesting a letter ruling.

Effective date

In general, Rev. Proc. 2013-30 is effective September 3, 2013 (i.e., the scheduled date of its publication in the Internal Revenue Bulletin).


Rev. Proc. 2013-30 also applies to:


  • Requests pending with the IRS Service Center pursuant to Rev. Proc. 97-48, Rev. Proc. 2003-43, Rev. Proc. 2004-48, and Rev. Proc. 2007-62 on September 3, 2013
  • Requests received by the IRS Service Center after September 3, 2013
  • All ruling requests pending in the IRS National Office on September 3, 2013
  • All ruling requests for relief received after September 3, 2013

A transition rule is provided for pending letter ruling requests. If an entity has filed a request for a letter ruling seeking relief for a late election under subchapter S (as covered by Rev. Proc. 2013-30) pending in the IRS National Office on September 3, 2013, the entity may rely on today’s revenue procedure, withdraw that letter ruling request, and receive a refund of its user fee. However, the IRS National Office will process letter ruling requests pending on September 3, 2013, unless the entity withdraws its letter ruling request prior to the earlier of:


  • October 18, 2013
  • The date of issuance of the letter ruling



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