II 

112TH CONGRESS 

2D SESSION S. 2271 

To amend the Internal Revenue Code of 1986 to extend the time for making 

S corporation elections, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 29, 2012 

Mr. FRANKEN (for himself, Ms. SNOWE, and Mr. ENZI) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to extend 

the time for making S corporation elections, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Elec5 tion Simplification Act’’. 

6 SEC. 2. EXTENSION OF TIME FOR MAKING S CORPORATION 

7 ELECTIONS. 

8 (a) IN GENERAL.—Subsection (b) of section 1362 of 

9 the Internal Revenue Code of 1986 is amended to read 

10 as follows: 


srobinson on DSK4SPTVN1PROD with BILLS
2 

•S 2271 IS

1 ‘‘(b) WHEN MADE.— 

2 ‘‘(1) RULES FOR NEW CORPORATIONS.—Except 

3 as provided in paragraph (2)— 

4 ‘‘(A) IN GENERAL.—An election under 

5 subsection (a) may be made by a small business 

6 corporation for any taxable year at any time 

7 during the period— 

8 ‘‘(i) beginning on the first day of the 

9 taxable year for which made, and 

10 ‘‘(ii) ending on the due date (with ex11 tensions) for filing the return for the tax12 able year. 

13 ‘‘(B) CERTAIN ELECTIONS TREATED AS

14 MADE FOR NEXT TAXABLE YEAR.—If— 

15 ‘‘(i) an election under subsection (a) 

16 is made for any taxable year within the pe17 riod described in subparagraph (A), but 

18 ‘‘(ii) either— 

19 ‘‘(I) on 1 or more days in such 

20 taxable year and before the day on 

21 which the election was made the cor22 poration did not meet the require23 ments of subsection (b) of section 

24 1361, or 


srobinson on DSK4SPTVN1PROD with BILLS
3 

•S 2271 IS

1 ‘‘(II) 1 or more of the persons 

2 who held stock in the corporation dur3 ing such taxable year and before the 

4 election was made did not consent to 

5 the election, 

6 then such election shall be treated as made 

7 for the following taxable year. 

8 ‘‘(C) ELECTION MADE AFTER DUE DATE

9 TREATED AS MADE FOR FOLLOWING TAXABLE

10 YEAR.—If— 

11 ‘‘(i) a small business corporation 

12 makes an election under subsection (a) for 

13 any taxable year, and 

14 ‘‘(ii) such election is made after the 

15 due date (with extensions) for filing the re16 turn for such year and on or before the 

17 due date (with extensions) for filing the re18 turn for the following taxable year, 

19 then such election shall be treated as made for 

20 the following taxable year. 

21 ‘‘(2) RULES FOR EXISTING C CORPORATIONS.— 

22 In the case of any small business corporation which 

23 was a C corporation for the taxable year prior to the 

24 taxable year for which the election is made under 


srobinson on DSK4SPTVN1PROD with BILLS
4 

•S 2271 IS

1 subsection (a), the rules under this paragraph shall 

2 apply in lieu of the rules under paragraph (1): 

3 ‘‘(A) IN GENERAL.—An election under 

4 subsection (a) may be made by a small business 

5 corporation for any taxable year— 

6 ‘‘(i) at any time during the preceding 

7 taxable year, or 

8 ‘‘(ii) at any time during the taxable 

9 year and on or before the 15th day of the 

10 3d month of the taxable year. 

11 ‘‘(B) CERTAIN ELECTIONS MADE DURING

1ST 21 12 ⁄2 MONTHS TREATED AS MADE FOR NEXT

13 TAXABLE YEAR.—If— 

14 ‘‘(i) an election under subsection (a) 

15 is made for any taxable year during such 

16 year and on or before the 15th day of the 

17 3d month of such year, but 

18 ‘‘(ii) either— 

19 ‘‘(I) on 1 or more days in such 

20 taxable year and before the day on 

21 which the election was made the cor22 poration did not meet the require23 ments of subsection (b) of section 

24 1361, or 


srobinson on DSK4SPTVN1PROD with BILLS
5 

•S 2271 IS

1 ‘‘(II) 1 or more of the persons 

2 who held stock in the corporation dur3 ing such taxable year and before the 

4 election was made did not consent to 

5 the election, 

6 then such election shall be treated as made for 

7 the following taxable year. 

‘‘(C) ELECTION MADE AFTER 1ST 21 8 ⁄2

9 MONTHS TREATED AS MADE FOR FOLLOWING

10 TAXABLE YEAR.—If— 

11 ‘‘(i) a small business corporation 

12 makes an election under subsection (a) for 

13 any taxable year, and 

14 ‘‘(ii) such election is made after the 

15 15th day of the 3d month of the taxable 

16 year and on or before the 15th day of the 

17 3rd month of the following taxable year, 

18 then such election shall be treated as made for 

19 the following taxable year. 

‘‘(D) TAXABLE YEARS OF 21 20 ⁄2 MONTHS OR

21 LESS.—For purposes of this paragraph, an elec22 tion for a taxable year made not later than 2 

23 months and 15 days after the first day of the 

24 taxable year shall be treated as timely made 

25 during such year. 


srobinson on DSK4SPTVN1PROD with BILLS
6 

•S 2271 IS

1 ‘‘(3) AUTHORITY TO TREAT LATE ELECTIONS, 

2 ETC., AS TIMELY.—If— 

3 ‘‘(A) an election under subsection (a) is 

4 made for any taxable year after the date pre5 scribed by this subsection for making such elec6 tion for such taxable year or no such election is 

7 made for any taxable year, and 

8 ‘‘(B) the Secretary determines that there 

9 was reasonable cause for the failure to timely 

10 make such election, 

11 the Secretary may treat such an election as timely 

12 made for such taxable year. 

13 ‘‘(4) MANNER OF ELECTION.—Elections may be 

14 made at any time as provided in this subsection by 

15 filing a form prescribed by the Secretary. For pur16 poses of any election described under paragraph (1), 

17 the Secretary shall provide that the election may be 

18 made on any timely filed small business corporation 

19 return for such taxable year, with the consents of all 

20 persons who held stock in the corporation during 

21 such taxable year included therewith. 

22 ‘‘(5) SECRETARIAL AUTHORITY.—The Secretary 

23 may prescribe such regulations, rules, or other guid24 ance as may be necessary or appropriate for pur25 poses of applying this subsection.’’. 


srobinson on DSK4SPTVN1PROD with BILLS
7 

•S 2271 IS

1 (b) REVOCATIONS.—Paragraph (1) of section 

2 1362(d) of the Internal Revenue Code of 1986 is amend3 ed— 

4 (1) by striking ‘‘subparagraph (D)’’ in subpara5 graph (C) and inserting ‘‘subparagraphs (D) and 

6 (E)’’, and 

7 (2) by adding at the end the following new sub8 paragraph: 

9 ‘‘(E) AUTHORITY TO TREAT LATE REVOCA10 TIONS AS TIMELY.—If— 

11 ‘‘(i) a revocation under subparagraph 

12 (A) is made for any taxable year after the 

13 date prescribed by this paragraph for mak14 ing such revocation for such taxable year 

15 or no such revocation is made for any tax16 able year, and 

17 ‘‘(ii) the Secretary determines that 

18 there was reasonable cause for the failure 

19 to timely make such revocation, 

20 the Secretary may treat such a revocation as 

21 timely made for such taxable year.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to elections for taxable years begin24 ning after the date of the enactment of this Act. 

Æ 


srobinson on DSK4SPTVN1PROD with BILLS