The IRS may not waive an invalid S corporation election if the failure is caused by:...

The IRS may not waive an invalid S corporation election if the failure is caused by: A. a failure to obtain required consents. B. a reasonable cause for a late election. C. a shareholder refusing to sign the consent during the IRS-approved extension period. D. an inadvertent failure to qualify as a small business corporation based on extenuating circumstances.

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Answer :A

1)There are many reasons why forms are not filed and not timely filed. Sometimes the mistake occurs at the time the corporation is organized. For example, the shareholders may have contemplated that the corporation would have S status from its inception, but the necessary forms were inadvertently not filed, such as the shareholder consent form. The Code and the IRS (through its administrative
procedures) provide significant liberality in remedying a filing failure.

2)Ordinarily, a timely filed S corporation election will not be invalid because a shareholder failed to file a timely consent to that election if (1) a reasonable cause for failure to file such consent (or consents) is shown, (2) proper consent is filed within an extended period granted by the IRS, and (3) new consents are filed by all persons who were shareholders at any time during the taxable year with respect to which the failure to consent occurred.

ekkarill92 answered 1 year ago

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