American Bar Association Section of Taxation Comments on Draft Revenue Procedure Addressing Issues Under Section 1362(f )

• Published in: The Tax lawyer 2018-01, Vol.71 (2), p.324-334
• Format: Article
• Language: English
• Subjects: Attorneys; Bar associations; C corporations; Committees; Compliance; Elections; Revenue procedures & rulings; Simplification; Small business; State elections; Stockholders; Tax courts; Taxation; Validity
• ISSN: 0040-005X; 2329-6089

[...]although taxpayers may welcome the news that PLRs are not necessary in certain circumstances, practitioners may take little comfort that a ruling is not necessary based solely on a non-binding speech by one Service attorney at a tax conference. [...]taxpayers certainly would benefit from formal guidance on which taxpayers could rely with respect to the no-rule areas. [...]they should not be construed as representing the position of the American Bar Association. The safe harbor provided in 4.02 of this revenue procedure applies only for purposes of determining whether a corporation's S corporation election is negatively impacted by the differences in timing or amount of the corporation's distributions to its shareholders. [...]this revenue procedure will not prevent the recharacterization or other treatment of the differences in timing under other Code sections or federal tax principles. The Service has concluded that a corporation may have substantially complied with the requirements for making an S corporation election even in situations in which certain information has inadvertently been omitted from the Form 2553 filed by the S corporation. [...]the Service will treat as valid an S corporation election filed by a corporation if- (1) The only question as to the validity of the election is the inadvertent omission of (or inadvertent erroneous response to) one or more of the following requests on Form 2553: (i) The date the corporation was incorporated; (ii) The corporation's state of incorporation; (iii) Whether the corporation's name or address changed after applying for its EIN; (iv) The corporation's selected tax year; (v) The name and title of an officer or legal representative the Service may contact for more information as well as that person's contact information; (vi) The number of shares or percentage of ownership of a particular shareholder; (vii) The date or dates on which stock was acquired; (viii) The social security number or employer identification number of one or more shareholders; and (ix) The date on which any shareholder's tax year ends.