LLC as S-Corp

An LLC or other entity that has filed a check-the-box election to be taxed as a corporation can elect S status if the entity and its shareholders meet the S corporation eligibility requirements (Regs. Sec. 1.1361-1(c); see also Regs. Sec. 301.7701-3).

An LLC that is eligible to elect S status and timely files an S election (Form 2553, Election by a Small Business Corporation) is considered to have made the election to be taxed as a corporation (Regs. Sec. 301.7701-3(c)(1)(v)(C)). 

These entities are not required to file Form 8832, Entity Classification Election. Other entities file the election to be taxed as a corporation on Form 8832 in accordance with Regs. Sec. 301.7701-3(c).

An entity that makes the deemed election to be taxed as a corporation by filing the S election, Form 2553, will be classified as a corporation on the date the S election is effective and will continue to be treated as a corporation until it makes another entity classification (Regs. Sec. 301.7701-3(c)(1)(v)(C)). 

If an entity elects to change its classification, it cannot change its classification again during the 60 months after the effective date of the election without IRS permission (Regs. Sec. 301.7701-3(c)(1)(iv)). 

Before such a change in classification takes place, the planner must carefully consider the tax effects of the change. For example, the reclassification of a corporation to a partnership under the check-the-box regulations is a complete liquidation of the corporation (Regs. Secs. 301.7701-3(g)(1)(ii) and (iii)).


Relief provisions when Form 8832 or Form 2553 is not timely filed

Relief under this revenue procedure is available when Form 2553 (or Form 8832, if that form should have been filed) is late. Rev. Proc. 2013-30 allows the entity to elect S status by filing Form 2553. The election can be filed with the current Form 1120-S if all earlier Forms 1120-S have been filed, or attached to the first Form 1120-S for the year including the intended effective date if filed simultaneously with any other delinquent Forms 1120-S. Form 2553 can also be filed separately. The forms must be filed within three years and 75 days after the original intended effective date of the election. The information and statements required by Rev. Proc. 2013-30 and additional statements relating to a late corporate classification election (required by Rev. Proc. 2013-30, Section 5.03) must be submitted with the Form 2553. If this revenue procedure is followed, Form 8832 is not required to be filed; only Form 2553 and the required statements need to be submitted.   


An LLC may elect to be classified as an association taxable as a corporation or an S corporation (assuming the LLC otherwise satisfies the S corporation requirements). 

If a taxpayer doesn't file Form 2553, the default classification will apply. Under Treas. Regs. Section 301.7701-3(c)(1)(v)(C), an eligible entity that timely files Form 2553 to elect to be an S corporation is deemed to have made an election to be classified as an association taxable as a corporation (assuming the entity satisfies the S corporation requirements). 


Source : irs.gov

https://www.irs.gov/faqs/small-business-self-employed-other-business/entities/entities-3