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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10097
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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What is the user fee a plr request to obtain relief under

Customer Question

What is the user fee for filing a plr request to obtain relief under section 1362(f)
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

This relates to Late election relief? (Sub S) -

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There is a process that's used IN LIEU ofthe letter ruling process ordinarily used to obtain relief for a late Election Under Subchapter S

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NO user fees there at all

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See p.13 of THIS PLR: http://www.irs.gov/pub/irs-drop/rp-13-30.pdf

Expert:  Lane replied 1 year ago.

This revenue procedure provides procedures for situations within its scope that are in lieu of the letter ruling process ordinarily used to obtain relief for a late Election Under Subchapter S (as defined in Section 4.01(5)) pursuant to § 1362(b)(5), § 1362(f), or §(###) ###-####1 and §(###) ###-####3. Accordingly, user fees do not apply to corrective actions under this revenue procedure.

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Rev. Proc. 2013–30, 2013–36 I.R.B. 173

Customer: replied 1 year ago.
In my situation it is an inadvertent s corp termination. One of the shareholders sold their stick to an unqualified s Corp shareholder.
Expert:  Lane replied 1 year ago.

You don't need a PLR for this to ask for relief, although I would work with a tax pro here

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If an S corporation inadvertently terminates its S corporation status, the IRS may grant relief. The corporation must be able to demonstrate that the termination was inadvertent. The IRS may provide relief to corporations (via a waiver) and potentially restore S status retroactively, if the following are present:

  1. The corporation previously made a valid S election and that election terminated;
  2. The subchapter S election qualification loss was triggered by an inadvertent act;
  3. The IRS determines that the termination was inadvertent;
  4. Steps are taken within a reasonable period to correct the condition that rendered the corporation ineligible to be an S corporation; and
  5. The corporation and persons who were shareholders during the period of the termination agree to make any adjustments the IRS requires that are consistent with the treatment of the corporation as an S corporation (Regs. Sec. 1.1362-4(a)).

The IRS determines whether a termination or invalid election was inadvertent. The corporation has the burden of establishing that, under the relevant facts and circumstances, the IRS should determine that the termination or invalid election was inadvertent. The fact that the terminating event or invalidity of the election was not reasonably within the control of the corporation and, in the case of a termination, was not part of a plan to terminate the election, or the fact that the terminating event or circumstance took place without the corporation’s knowledge, notwithstanding its due diligence to safeguard itself against such an event or circumstance, tends to establish that the termination or invalidity of the election was inadvertent (Regs. Sec. 1.1362-4(b)).

Expert:  Lane replied 1 year ago.

As the number of letter rulings involving them indicates, inadvertent terminations of S corporation status occur relatively frequently. However, if a corporation’s termination is truly inadvertent and the corporation promptly corrects the cause of the termination after it is discovered, the IRS will grant the corporation relief from the termination.

Expert:  Lane replied 1 year ago.

Again, you ARE asking for a ruling here, but the typical user fee for a PLR is waived.

Expert:  Lane replied 1 year ago.

Did you see my follow-up answer?

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Let me know ...

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Lane