Statement of Revocation of an S-Corporation Election

A Statement of Revocation of an S-Corporation Election is a legal template that outlines the process and documentation required for a business entity to revoke its status as an S-Corporation.

An S-Corporation election refers to a special tax status granted by the Internal Revenue Service (IRS) in the United States, allowing eligible small business corporations to avoid double taxation at the corporate level. By electing S-Corporation status, the business's income, losses, deductions, and credits are "passed through" to the shareholders, who report these on their individual tax returns.

However, there may be circumstances in which a business, for various reasons, decides to revoke its S-Corporation election. This could be due to changes in the company's structure, a shift in profitability or financial goals, or changes in the tax implications for the corporation and its shareholders.

The Statement of Revocation of an S-Corporation Election includes specific information required by the IRS to properly revoke the S-Corporation status. It typically addresses details such as the company's legal name, address, federal identification number, fiscal year-end, and the effective date of revocation.

The template also typically includes an acknowledgment that the company understands the consequences of revoking S-Corporation status, such as being subject to regular C-Corporation tax treatment and potential tax implications for the shareholders.

Once completed, the Statement of Revocation of an S-Corporation Election is typically reviewed by legal counsel and submitted to the IRS, along with any required attachments or supporting documentation. After the revocation takes effect, the company's tax filing obligations and the taxation of its income will no longer follow the rules associated with S-Corporations.