Mistake 1: using the wrong effective date
Item E controls the tax year for which the election is requested. For an entity making the election for its first tax year, the IRS instructions generally point to the earliest date it first had owners, first had assets, or began doing business. That date may be different from the date the form is signed.
An incorrect date can put the filing outside the ordinary two-month-and-15-day window or create a mismatch with the returns the entity planned to file. Reconcile the formation records, ownership start date, business activity, prior returns, and intended tax year before completing Item E.
Mistake 3: filing before confirming S corporation eligibility
A domestic eligible entity must satisfy the shareholder, stock, and tax-year requirements described in the Form 2553 instructions. An ineligible shareholder, prohibited ownership arrangement, or disqualifying second class of stock can prevent the requested election from being valid.
Review the operating agreement, ownership ledger, distribution rights, and shareholder types before filing. Form 2553 changes federal tax classification. It does not repair an ownership or governing-document problem that conflicts with the S corporation rules.
Mistake 4: using an outdated destination or keeping no delivery proof
The correct IRS service center and fax number depend on the entity’s principal business location, and IRS filing details can change. Use the current Form 2553 instructions on the day of submission rather than an old checklist or saved fax number.
Keep a complete copy of the signed submission and dated delivery evidence. If faxing, keep the signed original with the permanent records. The IRS instructions say to follow up if the entity does not receive an acceptance or nonacceptance notice within the stated processing window.
Mistake 5: treating late-election relief as a slogan
Writing the name of Rev. Proc. 2013-30 on a late form is not enough. The entity must fit the procedure, explain reasonable cause and diligent correction, include the required shareholder statements, and have filed affected returns consistently with the intended S corporation treatment.
A late-election package should connect each required condition to documented facts. If the procedure does not apply, do not promise retroactive acceptance. Evaluate whether a narrow exception or a private letter ruling request is the appropriate next step.
Primary sources
Ready to see whether an S Corp fits?
Start with a free readiness screen and planning estimate. Your final recommendation depends on your facts.