Curing A Late-Filed Subchapter S Election
Asset protection planning often involves forming new corporations or LLCs taxed as Subchapter S entities for income tax purposes. The general rule is that the taxpayer has a limited amount of time to file an S election after forming the corporation or LLC and obtaining a tax identification number. If the taxpayer misses the deadline he cannot qualify for the intended status as an S corporation. I discussed this issue with a prominent Orlando CPA named John Papa recently located in a new office suite in Longwood, Florida. Mr. Papa told me of a relatively new Revenue Procedure which liberalizes the rules for qualification as an S corporation by allowing delinquent corporations to salvage an S election. This rule applies to corporations and to LLCs that elect corporate taxation.
