Late 2553

[Hoosier]

Just starting to research this situation that I haven't encountered before. Thought I would post for ideas or suggestions to streamline the research...

Brought on new client in June 2017. Client began business 1/1/16 and previous preparer filed 1120S for 2016. E-file was accepted by IRS.

I have prepared 1120S for 2017, e-filed and e-file was rejected for tax type e-filed not the same as type on IRS record. Got POA, called IRS and found out that 2553 was never filed or processed.

Cannot e-file extension as this too is rejected each time. Thought I would mail in the paper extension.

I suppose the 2553 can still be filed but I'm not sure if it can be retro-active to the tax year 2016. Just looking for some thoughts to solve this situation as I'm sure there are preparers on this forum that have had similar issues. Looking for the most efficient way to file 2553 (for 1/1/16 effective date) and the 1120S for 2017.

[TaxGuyBill]

If there is "reasonable cause", the IRS tends to be very lenient with allowing the late S-election. The client must have assumed the first tax preparer filed the election, which seems like "reasonable cause" to me.

Revenue Procedure 2013-30 details the relief, and you can look that the section in the Instructions for Form 2553 too (see links below).

https://www.irs.gov/instructions/i2553#idm139773190562656

https://www.irs.gov/businesses/small-businesses-self-employed/late-election-relief

https://www.irs.gov/pub/irs-drop/rp-13-30.pdf