Rev.Proc. 2013-30

Part III. Administrative, Procedural, and Miscellaneous
2013 Marginal Production
Rates
Notice 2013–53
This notice announces the applicable
percentage under § 613A of the Internal
Revenue Code to be used in determining
percentage depletion for marginal properties for the 2013 calendar year.

Section 613A(c)(6)(C) defines the term
“applicable percentage” for purposes of
determining percentage depletion for oil
and gas produced from marginal properties. The applicable percentage is the percentage (not greater than 25 percent) equal
to the sum of 15 percent, plus one percentage point for each whole dollar by
which $20 exceeds the reference price (determined under § 45K(d)(2)(C)) for crude

oil for the calendar year preceding the calendar year in which the taxable year begins. The reference price determined under § 45K(d)(2)(C) for the 2012 calendar
year is $94.53.
The following table contains the applicable percentages for marginal production for taxable years beginning in calendar years 1991 through 2013.

Notice 2013–53
APPLICABLE PERCENTAGE FOR MARGINAL PRODUCTION
Calendar Year

Applicable Percentage

1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013

The principal author of this notice
is Martha M. Garcia of the Office of
Associate Chief Counsel (Passthroughs
and Special Industries).
For further
information regarding this notice contact
Ms. Garcia at (202) 622–3110 (not a
toll-free call).
26 CFR 601.105: Examination of returns and claims
for refund, credit or abatement; determination of
correct tax liability.
(Also: Part I, §§ 1361, 1362; 1.1361–1, 1.1361–3,

2013–36 I.R.B.

15
18
19
20
21
20
16
17
24
19
15
15
15
15
15
15
15
15
15
15
15
15
15

1.1362–4, 1.1362–6,
301.9100–3.)

301.7701–3,

301.9100–1,

Rev. Proc. 2013–30
SECTION 1. PURPOSE
This revenue procedure facilitates the
grant of relief to taxpayers that request
relief previously provided in numerous
other revenue procedures by consolidating
the provisions of those revenue procedures
into one revenue procedure and extending
relief in certain circumstances. This revenue procedure modifies and supersedes

173

percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent
percent

Rev. Proc. 2003–43, 2003–1 C.B. 998;
Rev. Proc. 2004–48, 2004–2 C.B. 172;
and Rev. Proc. 2007–62, 2007–2 C.B. 786
for taxpayers to make late S corporation
elections, Electing Small Business Trust
(ESBT) elections, Qualified Subchapter
S Trust (QSST) elections, Qualified Subchapter S Subsidiary (QSub) elections,
and late corporate classification elections
which the taxpayer intended to take effect on the same date that the taxpayer
intended that an S corporation election for
the entity should take effect. This revenue procedure also incorporates certain
relief provisions included in Rev. Proc.
97–48, 1997–2 C.B. 521, and supersedes

September 3, 2013

the relief provided in Situation 1 of Rev.
Proc. 97–48. This revenue procedure obsoletes the relief provided in Situation 2
of Rev. Proc. 97–48 because such relief
is no longer available. Furthermore, this
revenue procedure incorporates certain
relief provisions included in Rev. Proc.
2004–49, 2004–2 C.B. 210, and modifies
and supersedes the relief provided in sections 4.01 and 4.02 of Rev. Proc. 2004–49.
This revenue procedure obsoletes the relief provided in section 4.03 of Rev. Proc.
2004–49 because the time period for its
narrow scope of relief has expired.
This revenue procedure provides the
exclusive simplified methods for taxpayers to request relief for late S corporation
elections, ESBT elections, QSST elections, QSub elections, and late corporate
classification elections which the taxpayer
intended to take effect on the same date
that the taxpayer intended that an S corporation election for the entity should take
effect. This revenue procedure provides
relief if the taxpayer satisfies the general
requirements of Section 4 and the specific
requirements applicable to that taxpayer
under Sections 5 through 7 of this revenue
procedure. Accompanying this document
is a flowchart designed to aid taxpayers in
applying this revenue procedure.
SECTION 2. BACKGROUND
.01 S Corporation Elections.
(1) In General. Section 1361(a)(1) of
the Internal Revenue Code (Code) provides that the term “S corporation” means,
with respect to any taxable year, a small
business corporation for which an election
under § 1362(a) is in effect for that year.
Section 1362(b)(1) provides that a
small business corporation may make an
election to be an S corporation for any
taxable year (A) at any time during the
preceding taxable year, or (B) at any time
during the taxable year and on or before
the 15th day of the 3rd month of the taxable year. Section 1.1362–6(a)(2) of the
Income Tax Regulations provides that a
small business corporation makes an election to be an S corporation by filing a
completed Form 2553, Election by a Small
Business Corporation.
Under § 1362(b)(3), if an S corporation
election is made after the 15th day of the
3rd month of the taxable year and on or before the 15th day of the 3rd month of the

September 3, 2013

following taxable year, then the S corporation election is treated as made for that
following taxable year.
(2) Late S Corporation Elections. Section 1362(b)(5) provides that if (A) an
election under § 1362(a) is made for any
taxable year (determined without regard
to § 1362(b)(3)) after the date prescribed
by § 1362(b) for making the election for
the taxable year, or no election is made for
any taxable year, and (B) the Secretary determines that there was reasonable cause
for the failure to timely make the election, the Secretary may treat the election
as timely made for the taxable year (and
§ 1362(b)(3) shall not apply).
Rev. Proc. 97–48 and Rev. Proc.
2003–43 provide simplified methods for
taxpayers to request relief for a late S corporation election in certain circumstances.
.02 ESBT and QSST Elections.
(1) In General. Section 1361(b)(1)(B)
limits the permitted shareholders of an S
corporation to domestic individuals, estates, certain trusts, and certain exempt organizations.
Section 1361(d)(1)(A) provides that a
QSST is a permitted S corporation shareholder if the beneficiary of the QSST
makes an election under § 1361(d)(2).
A QSST is defined in § 1361(d)(3) as a
trust that (1) distributes or is required to
distribute all of its income to a citizen or
resident of the United States, (2) has certain trust terms, including the requirement
that there be only one income beneficiary,
(3) does not distribute any portion of the
trust corpus to anyone other than the current income beneficiary during the income
beneficiary’s lifetime, including the time
at which the trust terminates, and (4) the
income interest of the current income
beneficiary ceases on the earlier of such
beneficiary’s death or the termination of
the trust. Section 1361(d)(1) provides, in
pertinent part, that in the case of a QSST
with respect to which a beneficiary makes
an election under § 1361(d)(2): (A) the
trust is treated as owned by a citizen or
resident of the United States, and (B) for
purposes of § 678(a), the beneficiary of the
trust is treated as the owner of that portion
of the trust that consists of stock in an S
corporation with respect to which the election under § 1361(d)(2) is made. A QSST
election is made by signing and filing
an election statement with the applicable
Internal Revenue Service (IRS) Service

174

Center.
Section 1.1361–1(j)(6)(iii)(A)
provides that the QSST election must
be made within the 16-day-and-2-month
period beginning on the day that the S corporation stock is transferred to the trust.
Section 1361(c)(2)(A)(v) provides that
an ESBT (as defined in § 1361(e)) is a
permitted S corporation shareholder. Section 1361(e)(1) defines an Electing Small
Business Trust (ESBT) as any trust if: (1)
the trust does not have as a beneficiary
any person other than an individual, an
estate, or an organization described in
§ 170(c)(2) through (5); (2) no interest in
the trust was acquired by purchase; and
(3) an election has been made with respect
to the trust. To qualify as an ESBT, the
trustee of the trust must make an ESBT
election by signing and filing an election
statement with the applicable IRS Service
Center. Section 1.1361–1(m)(2)(iii) provides that the ESBT election must be filed
within the time requirements prescribed
in § 1.1361–1(j)(6)(iii) for filing a QSST
election (described above).
(2) Late ESBT and QSST Elections.
Failure to properly make an election to
be treated as an ESBT or a QSST may
result in a shareholder who is not an eligible S corporation shareholder under
§ 1361(b)(1)(B) holding stock of the
corporation. As a result, the failure to
properly file an ESBT or QSST election
may result in an inadvertently invalid S
corporation election, or in an inadvertent
termination of an S corporation election.
Section 1362(f) grants the Secretary authority to provide relief if a corporation’s S
corporation election was not effective for
the taxable year for which it was made by
reason of a failure to meet the requirements
of § 1361(b) or to acquire the required
shareholder consents. Under § 1362(f),
the Secretary may also grant relief if the
corporation’s S corporation election terminated under § 1362(d)(2) or (3). A corporation is eligible for relief under this provision if (1) the Secretary determines that
the circumstances resulting in the ineffectiveness or termination were inadvertent,
(2) no later than a reasonable period of
time after discovery of the circumstances
resulting in the ineffectiveness or termination, steps were taken (i) so that the S
corporation is a small business corporation, or (ii) to acquire the required shareholder consents, and (3) the corporation,
and each person who was a shareholder of

2013–36 I.R.B.

the corporation at any time during the period specified pursuant to § 1362(f), agrees
to make any adjustments (consistent with
the treatment of the corporation as an S
corporation) as may be required by the
Secretary with respect to the period. If
a corporation is eligible for relief under
this provision, then, notwithstanding the
circumstances resulting in the ineffectiveness or termination, the corporation will be
treated as an S corporation during the period specified by the Secretary.
Section 1.1362–4 sets forth additional
guidance regarding inadvertent termination relief. Section 1.1362–4(b) provides
that the corporation has the burden of establishing that, under the relevant facts and
circumstances, the Commissioner should
determine that the termination was inadvertent. The fact that the terminating event
was not reasonably within the control of
the corporation and was not part of a plan
to terminate the election, or the fact that
the event took place without the knowledge of the corporation, notwithstanding
its due diligence to safeguard against such
an event, tends to establish that the termination was inadvertent.
Section 1.1362–4(c) provides that a corporation may request inadvertent termination relief by submitting a request for
a letter ruling. Section 1.1362–4(d) provides that the Commissioner may condition the granting of a ruling request on
any adjustments that are appropriate. Section 1.1362–4(e) requires that the corporation and all persons who were shareholders
of the corporation at any time during the
time specified by the Commissioner consent to any adjustments that the Commissioner may require.
The IRS will grant relief for both the
late ESBT and QSST elections and the inadvertently invalid S corporation election
or inadvertent termination of the S corporation election if the standard described in
§ 1362(f) for an inadvertently invalid S
corporation election or an inadvertent termination of an S corporation election is
satisfied.
Rev. Proc. 2003–43 provides a simplified method for taxpayers to request relief
for late ESBT and QSST elections if the
request for relief is filed within 24 months
of the due date of the election.
.03 Qualified Subchapter S Subsidiary
(QSub) Elections. (1) In General. Section 1361 generally provides that an S cor-

2013–36 I.R.B.

poration may elect to treat certain wholly
owned subsidiaries as QSubs (as defined
in § 1361(b)(3)(B)). Section 1361(b)(3)(B)
defines a QSub as a domestic corporation
that is not an ineligible corporation if (1)
an S corporation holds 100 percent of the
stock of the corporation, and (2) that S corporation elects to treat the subsidiary as
a QSub. Section 1361(b)(3)(A) provides
that a corporation that is a QSub is not
treated as a separate corporation, and all
assets, liabilities, and items of income, deduction, and credit of the QSub are treated
as assets, liabilities, and items of income,
deduction, and credit of the parent S corporation. Section 1.1361–3 describes the
time and manner for a corporation to make
a QSub election. Section 1.1361–3(a)(2)
provides that an S corporation may make a
QSub election by filing the election form
with the applicable IRS Service Center.
Form 8869, Qualified Subchapter S Subsidiary Election, is used to make a QSub
election. Under § 1.1361–3(a)(3), the election to treat a subsidiary as a QSub may be
filed at any time during the taxable year.
Section 1.1361–3(a)(4) provides that the
effective date is the date specified on the
form (provided the date specified is not
earlier than 2 months and 15 days before
the date of the filing and the date specified
is not more than 12 months after the date of
the filing), or on the date the election form
is filed if no date is specified. If an election
form specifies an effective date more than
2 months and 15 days prior to the date on
which the election form is filed, it will be
effective 2 months and 15 days prior to the
date it is filed. If an election form specifies
an effective date more than 12 months after the date on which the election is filed,
it will be effective 12 months after the date
it is filed.
(2) Late QSub Elections.
Under
§ 301.9100–1(c), the Commissioner may
grant a reasonable extension of time under
the rules set forth in §§ 301.9100–2 and
301.9100–3 to make a regulatory election,
or a statutory election, under all subtitles
of the Code, except subtitles E, G, H, and
I.
Section 301.9100–1(b) defines the term
“regulatory election” as an election whose
due date is prescribed by a regulation
published in the Federal Register, or a
revenue ruling, revenue procedure, notice, or announcement published in the
Internal Revenue Bulletin. Because a

175

QSub election is a regulatory election, the
Commissioner may permit a late QSub
election under the rules set forth in section
301.9100–3.
Sections
301.9100–1
through
301.9100–3 provide the standards that
the Commissioner will use to determine
whether to grant an extension of time to
make an election. Section 301.9100–2
provides automatic extensions of time
for making certain elections. Section
301.9100–3 provides extensions of time
for making elections that do not meet the
requirements of § 301.9100–2.
Requests for relief under § 301.9100–3
will be granted when the taxpayer provides the evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith,
and the grant of relief will not prejudice
the interests of the Government. Section
301.9100–3(b)(1) provides that subject to
paragraphs (b)(3)(i) through (b)(3)(iii) of
§ 301.9100–3, a taxpayer is deemed to
have acted reasonably and in good faith
if the taxpayer meets one of the requirements in § 301.9100–3(b)(1)(i)-(v). Section 301.9100–3(b)(1)(v) includes situations in which the taxpayer reasonably relied on a qualified tax professional (including a tax professional employed by the taxpayer), and the tax professional failed to
make, or advise the taxpayer to make, the
election.
Rev. Proc. 2003–43 provides a simplified method for taxpayers to request relief
for a late QSub election if the request for
relief is filed within 24 months of the due
date of the election. Rev. Proc. 2004–49
provides alternative relief when the QSub
election terminated as a result of a transfer (whether by sale or as part of a reorganization under § 368(a)(1)(A), (C), or
(D) (but not as part of a reorganization under § 368(a)(1)(F)) by the S corporation of
100 percent of the QSub stock to another
S corporation. Section 4.01 of Rev. Proc.
2004–49 allows the acquiring S corporation to request prospective relief by attaching a completed Form 8869 to its timely
filed return (including extensions) for the
taxable year during which the transfer occurred, and section 4.02 of Rev. Proc.
2004–49 provides alternative relief as provided by Rev. Proc. 2003–43. Section
4.03 of Rev. Proc 2004–49 also provides
retroactive relief for such transactions if
they occurred prior to August 16, 2004,

September 3, 2013

provided that the relief requests were filed
before August 16, 2005.
.04 Entity Classification Elections.
(1) In General. Section 301.7701–2(a)
of the Procedure and Administration Regulations defines a “business entity” as any
entity recognized for federal tax purposes
that is not properly classified as a trust under § 301.7701–4 or otherwise subject to
special treatment under the Code.
Section 301.7701–3(a) provides that a
business entity that is not classified as a
corporation under § 301.7701–2(b)(1), (3),
(4), (5), (6), (7), or (8) (an “eligible entity”)
can elect its classification for federal tax
purposes.
Section 301.7701–3(b)(1) provides
that, except as otherwise provided in
§ 301.7701–3(b)(3), unless the entity
elects otherwise, a domestic eligible entity
is (i) a partnership if it has two or more
members, or (ii) disregarded as an entity
separate from its owner if it has a single
owner.
Section
301.7701–3(c)(1)(i)
provides that, except as provided in
§ 301.7701–3(c)(1)(iv) and (v), an eligible
entity may elect to be classified other than
as provided in § 301.7701–3(b) by filing
Form 8832, Entity Classification Election,
with the applicable IRS Service Center
designated on Form 8832.
Section 301.7701–3(c)(1)(iii) provides
that the entity classification election will
be effective on the date specified by the
entity on the Form 8832 or on the date
filed if no date is specified on the election
form. The effective date specified on Form
8832 cannot be more than 75 days prior
to the date on which the election is filed
and cannot be more than 12 months after
the date on which the election is filed. If
an election specifies an effective date more
than 75 days prior to the date on which
the election is filed, the election will be
effective 75 days prior to the date it was
filed. If an election specifies an effective
date more than 12 months from the date
on which the election is filed, the election
will be effective 12 months after the date
the election was filed.
(2) Late Entity Classification Elections.
Under § 301.9100–1(c), the Commissioner
may grant a reasonable extension of time
under the rules set forth in §§ 301.9100–2
and 301.9100–3 to make a regulatory election, or a statutory election, under all sub-

September 3, 2013

titles of the Code, except subtitles E, G, H,
and I.
Section 301.9100–1(b) defines the term
“regulatory election” as an election whose
due date is prescribed by a regulation
published in the Federal Register, or a
revenue ruling, revenue procedure, notice,
or announcement published in the Internal
Revenue Bulletin. Because an entity classification election is a regulatory election,
the Commissioner may permit a late entity
classification election under the rules set
forth in § 301.9100–3.
Sections
301.9100–1
through
301.9100–3 provide the standards that
the Commissioner will use to determine
whether to grant an extension of time to
make an election. Section 301.9100–2
provides automatic extensions of time
for making certain elections. Section
301.9100–3 provides extensions of time
for making elections that do not meet the
requirements of § 301.9100–2. Requests
for relief under § 301.9100–3 will be
granted when the taxpayer provides the
evidence to establish to the satisfaction of
the Commissioner that the taxpayer acted
reasonably and in good faith, and the grant
of relief will not prejudice the interests of
the Government.
Rev. Proc. 2009–41, 2009–2 C.B.
439, provides relief with respect to late
entity classification elections for an eligible entity’s initial classification election or
change in classification election. Eligible entities meeting the requirements under Section 4 of that revenue procedure
must request relief within 3 years and 75
days of the requested effective date of the
eligible entity’s classification election.
Under § 301.7701–3(c)(1)(v)(C), an
eligible entity that timely elects to be an S
corporation under § 1362(a)(1) is treated
as having made an election to be classified as an association, provided that (as
of the effective date of the election under
§ 1362(a)(1)) the entity meets all other
requirements to qualify as a small business corporation under § 1361(b). Section
301.7701–3(c)(1)(v)(C) further provides
that, subject to § 301.7701–3(c)(1)(iv),
the deemed election to be classified as
an association generally will apply as of
the effective date of the S corporation
election and will remain in effect until
the entity makes a valid election under
§ 301.7701–3(c)(1)(i) to be classified as
other than an association.

176

Rev. Proc. 2004–48 and Rev. Proc
2007–62 provide simplified methods for
taxpayers to request relief for a late S corporation election and a late corporate classification election intended to be effective
on the same date as the S corporation election.
SECTION 3. SCOPE
.01 In General. This revenue procedure expands and consolidates relief provisions included in prior revenue procedures
that provide a simplified method for taxpayers to request relief for late S corporation elections, ESBT elections, QSST elections, QSub elections, and corporate classification elections intended to be effective
on the same date as the S corporation election for the entity.
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 § 301.9100–1
and § 301.9100–3. Accordingly, user fees
do not apply to corrective actions under
this revenue procedure.
Section 4.01 of this revenue procedure
provides a glossary of certain terms used
in this revenue procedure. Section 4.02
of this revenue procedure provides the
general requirements for relief for all late
Elections Under Subchapter S. Section
4.03 of this revenue procedure provides
procedural requirements for relief for all
late Elections Under Subchapter S. Section
4.04 of this revenue procedure provides
additional procedural requirements for relief when one or more Requesting Entities
(as defined in Section 4.01(6)) request relief for multiple late elections with respect
to a single S corporation. Section 5 of this
revenue procedure provides a simplified
method for taxpayers to request relief for
late S corporation elections (which may
or may not include a Deemed Entity Classification Election (as defined in Section
4.01(1) of this revenue procedure)). Section 6 of this revenue procedure provides a
simplified method for taxpayers to request
relief for late ESBT and QSST elections.
Section 7 of this revenue procedure provides a simplified method for taxpayers to
request relief for late QSub elections.

2013–36 I.R.B.

.02 Relief if this Revenue Procedure is
not Applicable. An entity that does not
meet the requirements for relief or is denied relief under this revenue procedure
may seek relief by requesting a letter ruling. The procedural requirements for requesting a letter ruling are described in
Rev. Proc. 2013–1, 2013–1 I.R.B. 1, or
its successors.
SECTION 4. DEFINITIONS
AND REQUIREMENTS FOR
RELIEF UNDER THIS REVENUE
PROCEDURE.
.01 Definitions.
(1) Deemed Entity Classification Election. For purposes of this revenue procedure, a Deemed Entity Classification Election occurs when an eligible entity that
timely elects to be an S corporation under
§ 1362(a)(1) is treated as having made an
election to be classified as an association
under § 301.7701–3(c)(1)(v)(C), provided
that (as of the Effective Date of the election under § 1362(a)(1)) the entity meets
all other requirements to qualify as a small
business corporation under § 1361(b).
(2) Due Date of the Election Under
Subchapter S. For purposes of this revenue
procedure, the Due Date of the Election
Under Subchapter S will vary depending
on the type of election sought. For a corporation (or an eligible entity to which
a Deemed Entity Classification Election
under § 301.7701–3(c)(1)(v)(C) applies)
that requests to be treated as an S corporation, the Due Date of the Election Under
Subchapter S is specified by § 1362(b).
For ESBT or QSST elections, the Due
Date of the Election Under Subchapter S
is specified by § 1.1361–1(m)(2)(iii) or
§ 1.1361–1(j)(6)(iii), respectively. The
Due Date of the Election Under Subchapter S for a parent S corporation to
make an election to treat a subsidiary as
a QSub on a given date is specified by
§ 1.1361–3(a)(3).
(3) Effective Date. For purposes of this
revenue procedure, the Effective Date is
the date on which the S corporation election, ESBT election(s), QSST election(s),
QSub election(s), or corporate classification election is intended to be effective.
(4) Election Form. For purposes of
this revenue procedure, the Election
Form refers to Form 2553 for S corporation elections (including a Deemed

2013–36 I.R.B.

Entity Classification Election under
§ 301.7701–3(c)(1)(v)(C)), separate statements made by electing ESBTs under
§ 1.1361–1(m)(2), Form 2553 and separate statements made by electing QSSTs
under § 1.1361–1(j)(6), and Form 8869
for QSub Elections.
(5) Election Under Subchapter S. For
purposes of this revenue procedure, Election Under Subchapter S refers to an election by a corporation (or an eligible entity
to which a Deemed Entity Classification
Election under § 301.7701–3(c)(1)(v)(C)
will apply), an election by a trustee to treat
a trust as an ESBT under § 1361(e), an
election by a trust beneficiary to treat a
trust as a QSST under § 1361(d), or an
election by a parent S corporation to treat a
subsidiary as a QSub under § 1361(b)(3).
(6) Requesting Entity. For purposes of
this revenue procedure, the Requesting Entity is a corporation (or an eligible entity
to which a Deemed Entity Classification
Election under § 301.7701–3(c)(1)(v)(C)
will apply) seeking to be treated as an S
corporation under § 1362, a trustee seeking
to treat a trust as an ESBT under § 1361(e),
a trust beneficiary seeking to treat a trust as
a QSST under § 1361(d), or a parent S corporation seeking to treat a subsidiary as a
QSub under § 1361(b)(3).
.02 General Requirements for Relief. In
addition to the specific requirements for
relief described in Sections 5, 6, or 7 of this
revenue procedure, the following requirements must be met:
(1) The Requesting Entity intended to
be classified as an S corporation, intended
the trust to be an ESBT, intended the trust
to be a QSST, or intended to treat a subsidiary corporation as a QSub as of the Effective Date;
(2) The Requesting Entity requests relief under this revenue procedure within 3
years and 75 days after the Effective Date
(except in the case of corporations requesting relief under Section 5.04 of this revenue procedure);
(3) The failure to qualify as an S corporation, ESBT, QSST, or QSub as of the Effective Date was solely because the Election Under Subchapter S was not timely
filed by the Due Date of the Election Under Subchapter S; and
(4) In the case of a request for relief for
a late S corporation or QSub election, the
Requesting Entity has reasonable cause for
its failure to make the timely Election Un-

177

der Subchapter S and has acted diligently
to correct the mistake upon its discovery.
In the case of a request for relief for an
inadvertently invalid S corporation election or an inadvertent termination of an S
corporation election due to the failure to
make the timely ESBT or QSST election,
the failure to file the timely Election Under Subchapter S was inadvertent and the S
corporation and the person or entity seeking relief acted diligently to correct the
mistake upon its discovery.
.03 General Procedural Requirements
for Relief.
(1) In general. The Requesting Entity may request relief for a late Election
Under Subchapter S by properly completing the Election Form(s) and attaching
the supporting documents as described
in Sections 5, 6, and 7, as applicable.
In addition to any supporting documents
described in Sections 5, 6, and 7, as applicable, a properly completed Election
Form must include a statement (the “Reasonable Cause/Inadvertence Statement”)
from the Requesting Entity that complies
with Section 4.03(3) of this revenue procedure and that describes (i) its reasonable
cause for failure to timely file the Election
Under Subchapter S (in the case of late S
corporation or QSub elections) or that the
failure to timely file the Election Under
Subchapter S was inadvertent (in the case
of late QSST or ESBT elections), and
(ii) its diligent actions to correct the mistake upon its discovery. The applicable
Election Form must state at the top of the
document “FILED PURSUANT TO REV.
PROC. 2013–30.”
(2) Filing the Election Form with the
IRS Service Center. The Requesting Entity must file the applicable Election Form
with the applicable IRS Service Center by
either:
(a) Attaching the Election Form to the
S corporation’s current year Form 1120S.
In the case of an S corporation that has
filed all Forms 1120S for tax years between the Effective Date and the current
year, the Election Form(s) can be attached
to the current year Form 1120S as long
as the current year Form 1120S is filed
within 3 years and 75 days after the Effective Date. An extension of time to file the
current year Form 1120S will not extend
the due date for relief under this revenue
procedure beyond 3 years and 75 days following the Effective Date. For example,

September 3, 2013

if the extended due date of tax year 2016
Form 1120S is September 15, 2017, an
Election Form for a late QSST Election
with an Effective Date of June 1, 2014
can be attached to the 2016 Form 1120S
only if the 2016 Form 1120S is filed before August 15, 2017 (which is 3 years
and 75 days following the June 1, 2014
Effective Date). The Form 1120S must
state at the top “INCLUDES LATE ELECTION(S) FILED PURSUANT TO REV.
PROC. 2013–30” or comply with specific
instructions included with the Form 1120S
instructions;
(b) Attaching the Election Form to one
of the S corporation’s late filed prior year
Forms 1120S. In the case of an S corporation that has not filed Form 1120S (or
any other income tax return or information return (within the meaning of Subpart
A of Part III of Subchapter A of Chapter 61)) for the tax year including the Effective Date or any year following the Effective Date, an Election Form may be attached to the Form 1120S for the year including the Effective Date as long as (i) the
Form 1120S for the year including the Effective Date is filed within 3 years and 75
days after the Effective Date, and (ii) all
other delinquent Forms 1120S are filed simultaneously and consistently with the requested relief. For example, if an S corporation intended to make a QSub Election with an Effective Date of June 1, 2012,
but it failed to file any income tax returns,
it can attach an Election Form to a late
filed 2012 Form 1120S only if the late filed
2012 Form 1120S is filed before August
15, 2015 (which is 3 years and 75 days
following the June 1, 2012 Effective Date)
and all other delinquent Forms 1120S are
filed simultaneously and consistently with
the requested relief. The Form 1120S must
state at the top “INCLUDES LATE ELECTION(S) FILED PURSUANT TO REV.
PROC. 2013–30” or comply with specific
instructions included with the Form 1120S
instructions; or
(c) Filing Election Form independent of
Form 1120S. The Requesting Entity can
submit the Election Form directly to the
applicable IRS Service Center within 3
years and 75 days after the Effective Date.
(3) Supporting statements must be
signed under Penalties of Perjury. The
Reasonable Cause/Inadvertence Statement
(required by Section 4.03(1)) and other
statements required by Sections 5, 6, and

September 3, 2013

7, as applicable, must each contain a dated
declaration that states: “Under penalties
of perjury, I (we) declare that I (we) have
examined this election, including accompanying documents, and, to the best of my
(our) knowledge and belief, the election
contains all the relevant facts relating to
the election, and such facts are true, correct, and complete.” An officer of the S
corporation authorized to sign, the trustee
of the ESBT, the current income beneficiary of the QSST, or a shareholder, as
applicable, must sign the declaration.
.04 Supplemental procedural requirements when seeking relief for multiple
late elections. If one or more Requesting
Entities are seeking relief under this revenue procedure with respect to a single
S corporation, all of the Election Forms
can be filed at the same time using one of
the methods described in Section 4.03(2).
When multiple requests for relief are submitted simultaneously, each application
for relief must independently comply with
the procedural requirements in Section
4.03(1). However, there is no requirement that all Requesting Entities must
file requests for relief under this revenue
procedure with respect to a single S corporation simultaneously. An application
for relief under this revenue procedure
by a Requesting Entity will not prejudice
subsequent relief requests by the same
Requesting Entity, or other Requesting
Entities, with respect to a single S corporation.
.05 Relief for Late Election Under Subchapter S. Upon receipt of a completed request for relief under this revenue procedure, the IRS will determine whether the
requirements for granting additional time
to file the Election Under Subchapter S
have been satisfied and will notify the Requesting Entity(s) of the result of this determination.
SECTION 5. RELIEF FOR LATE S
CORPORATION ELECTIONS.
.01 Form 2553. A Requesting Entity
seeking relief for a late S corporation election must file a completed Form 2553,
signed by (1) an officer of the corporation
authorized to sign, and (2) all persons who
were shareholders at any time during the
period that began on the first day of the taxable year for which the election is to be ef-

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fective and ends on the day the completed
Election Form is filed.
.02 Supplemental materials. The completed Election Form must include statements from all shareholders during the period between the date the S corporation
election was to have become effective and
the date the completed Election Form is
filed that they have reported their income
on all affected returns consistent with the S
corporation election for the year the election should have been filed and for all subsequent years. Such statements must comply with the requirement in Section 4.03(3)
of this revenue procedure.
.03 Additional materials for a late corporate classification election intended to
be effective on the same date that the S
corporation election was intended to be
effective. In addition to the materials required under Section 5.02 of this revenue
procedure, in the case of a late corporate
classification election intended to be effective on the same date that the S corporation election was intended to be effective,
the completed Election Form must also include the following representations, which
must comply with the requirement in Section 4.03(3) of this revenue procedure:
(1) The Requesting Entity is an eligible
entity as defined in § 301.7701–3(a);
(2) The Requesting Entity intended to
be classified as a corporation as of the Effective Date of the S corporation status;
(3) The Requesting Entity fails to
qualify as a corporation solely because
Form 8832 was not timely filed under
§ 301.7701–3(c)(1)(i), or Form 8832 was
not deemed to have been filed under
§ 301.7701–3(c)(1)(v)(C);
(4) The Requesting Entity fails to qualify as an S corporation on the Effective
Date of the S corporation status solely because the S corporation election was not
timely filed pursuant to § 1362(b); and
(5)(i) The Requesting Entity timely
filed all required federal tax returns and
information returns consistent with its requested classification as an S corporation
for all of the years the entity intended to
be an S corporation and no inconsistent
tax or information returns have been filed
by or with respect to the entity during any
of the taxable years, or
(ii) The Requesting Entity has not filed
a federal tax or information return for the
first year in which the election was intended to be effective because the due date

2013–36 I.R.B.

has not passed for that year’s federal tax or
information return.
.04 Relief where all returns filed as an
S corporation. The requirement for relief
imposed by Section 4.02(2) (providing that
relief must be sought within three years
and 75 days of the Effective Date) is not
applicable in the case of corporations if the
following conditions are met:
(1) The corporation is not seeking late
corporate classification election relief concurrently with a late S corporation election
under this revenue procedure;
(2) The corporation fails to qualify as
an S corporation solely because the Form
2553 was not timely filed;
(3) The corporation and all of its shareholders reported their income consistent
with S corporation status for the year the
S corporation election should have been
made, and for every subsequent taxable
year (if any);
(4) At least 6 months have elapsed since
the date on which the corporation filed its
tax return for the first year the corporation
intended to be an S corporation; and
(5) Neither the corporation nor any of
its shareholders was notified by the IRS
of any problem regarding the S corporation status within 6 months of the date on
which the Form 1120S for the first year
was timely filed, and
(6) The completed Election Form includes the statement(s) described in Section 5.02 of this revenue procedure.
SECTION 6. RELIEF FOR LATE ESBT
AND QSST ELECTIONS.
.01 ESBT or QSST Election. The trustee
of an ESBT or the current income beneficiary of a QSST must sign and file the appropriate Election Form. The completed
Election Form must include the following
statements (each of which must comply
with the requirement in Section 4.03(3) of
this revenue procedure):
(1) A statement from the trustee of the
ESBT or the current income beneficiary of
the QSST that includes the information required by § 1.1361–1(m)(2)(ii) (in the case
of ESBT elections) or § 1.1361–1(j)(6)(ii)
(in the case of QSST elections);
(2) In the case of a QSST, a statement
from the trustee that the trust satisfies the
QSST requirements of § 1361(d)(3) and
that the income distribution requirements
have been and will continue to be met;

2013–36 I.R.B.

(3) In the case of an ESBT, a statement
from the trustee that all potential current
beneficiaries meet the shareholder requirements of § 1361(b)(1) and that the trust satisfies the requirements of an ESBT under
§ 1361(e)(1) other than the requirement to
make an ESBT election; and
(4) Statements from all shareholders
during the period between the date the S
corporation election was to have become
effective or was terminated and the date
the completed Election Form is filed that
they have reported their income on all
affected returns consistent with the S corporation election for the year the election
should have been made and for all subsequent years.
SECTION 7. RELIEF FOR LATE QSUB
ELECTIONS.
.01 Form 8869. An S corporation seeking relief for a late QSub election for a subsidiary must file a completed Form 8869.
.02 Supplemental materials. The completed Election Form must include a
statement signed by an officer of the S
corporation, which complies with the
requirement in Section 4.03(3) of this
revenue procedure, that the subsidiary corporation satisfies the QSub requirements
of § 1361(b)(3)(B), and that all assets,
liabilities, and items of income, deduction,
and credit of the QSub have been treated
as assets, liabilities, and items of income,
deduction, and credit of the S corporation
on all affected returns consistent with the
QSub election for the year the election
was intended to be effective and for all
subsequent years.
SECTION 8. EFFECTIVE DATE
.01 In general. Except as provided in
Section 8.02, this revenue procedure is effective September 3, 2013, the date of publication of this revenue procedure in the Internal Revenue Bulletin. This revenue procedure applies to requests pending with the
IRS Service Center pursuant to Rev. Procs.
97–48, 2003–43, 2004–48, and 2007–62
on September 3, 2013, and to requests received thereafter. It also applies to all ruling requests pending in the IRS national
office on September 3, 2013, and to requests for relief received thereafter.
.02 Transition rule for pending letter
ruling requests. If an entity has filed a re-

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quest for a letter ruling seeking relief for a
late Election Under Subchapter S covered
by this revenue procedure that is pending in the national office on September 3,
2013, the entity may rely on this revenue
procedure, withdraw that letter ruling request, and receive a refund of its user fee.
However, the national office will process
letter ruling requests pending on September 3, 2013, unless, prior to the earlier of
October 18, 2013, or the issuance of the
letter ruling, the entity notifies the national
office that it will rely on this revenue procedure and withdraw its letter ruling request.
SECTION 9. EFFECT ON OTHER
DOCUMENTS
This revenue procedure modifies
and supersedes Rev. Procs. 2003–43,
2004–48, and 2007–62. This revenue
procedure supersedes Situation 1 and obsoletes Situation 2 of Rev. Proc. 97–48.
This revenue procedure modifies and supersedes sections 4.01 and 4.02 and obsoletes section 4.03 of Rev. Proc. 2004–49.
SECTION 10. PAPERWORK
REDUCTION ACT
The collection of information contained in this revenue procedure has been
reviewed and approved by the Office of
Management and Budget (OMB) in accordance with the Paperwork Reduction Act
of 1995 (44 U.S.C. 3507(d)) under control
number 1545–1548.
The collection of information in this
revenue procedure is in Section 4.03 and
Sections 5 through 7. The information will
help the IRS to determine whether a taxpayer has met the requirements of Sections 4 through 7 of this revenue procedure and whether a taxpayer has reasonable cause for failing to make a timely
election. The collection of information is
required to make a late election pursuant
to this revenue procedure. This information will be used to determine whether the
eligibility requirements for obtaining relief
have been met. The collection of information is required to obtain a benefit. The
likely respondents are business or other
for-profit institutions.
The estimated total annual reporting
burden is 50,000 hours.

September 3, 2013

The estimated annual burden per respondent varies from .5 hours to 1 hour, depending on individual circumstances, with
an estimated average burden of 1 hour to
complete the statement. The estimated
number of respondents is 50,000.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in

September 3, 2013

the administration of any internal revenue
law. Generally tax returns and tax return
information are confidential, as required
by section 6103.

& Special Industries). For further information regarding this revenue procedure
contact Mr. Kirk on (202) 622–3060 (not
a toll-free call).

SECTION 11. DRAFTING
INFORMATION
The principal author of this revenue
procedure is David H. Kirk of the Office
of Associate Chief Counsel (Passthroughs

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