How to revoke an S-corp election

What does revoking the S election actually mean?

An S corporation is not a separate kind of company, it is an ordinary corporation (or, less often, an LLC) that filed Form 2553 to be taxed under Subchapter S, so income passes through to shareholders instead of being taxed at the entity level. Revoking that election undoes only the tax choice. The corporation keeps existing, keeps its EIN, keeps operating, and keeps filing, it simply reverts to being taxed as a C corporation on Form 1120 instead of a pass-through on Form 1120-S.

Nothing about the entity's legal existence changes. You are not filing anything with the Secretary of State, not winding down, not closing accounts. This is a letter to the IRS that changes a tax status going forward, and that distinction is the entire point of this page: revocation and dissolution get confused constantly, and they solve completely different problems.

Revoke the election or dissolve the entity?

These answer two different questions. You revoke the S election when the business is continuing but you no longer want pass-through taxation, maybe you are raising money from investors that S rules don't allow, adding a shareholder that would break eligibility, or you have decided C-corp treatment fits better. The entity lives on; only its tax return changes.

You dissolve the entity when you are done with the business. In that case there is nothing to revoke, the S election ends automatically when the corporation ceases to exist. Dissolving means adopting a plan of dissolution, filing the state dissolution and a final 1120-Sand closing the IRS business account behind your EIN. If your real goal is to close, follow that path and skip the revocation entirely, the extra form only adds confusion.

How do you revoke the election?

There is no dedicated IRS form for revocation, you file a written statement. It goes to the IRS service center where the original Form 2553 was filed, and it needs to:

• State that the corporation is revoking its election under Section 1362(a).
• Give the corporation's name, EIN and address.
• State the number of shares of stock, including non-voting, issued and outstanding at the time.
• Attach the consent of shareholders holding more than half the shares, each signed.
• Be signed by an officer under penalties of perjury.

Because the IRS does not send a routine acknowledgment, keep proof of mailing, certified mail or a tracked service, so you can show when and that it was filed.

What's the timing and effective date?

The date you file drives when the revocation takes effect. File by the 15th day of the third month of the tax year, March 15 for a calendar-year corporation, and it is effective for that whole year. File after that, and unless you specify otherwise, it generally takes effect at the start of the next tax year. You can also name a specific prospective effective date in the statement, including a mid-year date, which splits the year into an S short year and a C short year with a return for each.

What happens after you revoke?

From the effective date, the corporation is taxed as a C corporation: it files Form 1120, pays tax at the entity level, and dividends to shareholders are taxed again when distributed, the classic two-layer C-corp pattern the S election was chosen to avoid. If the revocation lands mid-year, you file a final S-corporation return for the short S period and a C-corporation return for the rest. None of this closes the company or its accounts; the EIN and every registration stay exactly where they were.

What is the five-year re-election rule?

Revocation is meant to be durable. Once a corporation revokes or otherwise terminates its S election, the tax code bars it from re-electing S status for five tax years without IRS consent. The IRS can waive that wait in limited situations, but you should not plan around getting a waiver. Treat the decision as a multi-year commitment to C-corp taxation rather than a setting you can toggle, which is another reason to be sure revocation, not dissolution, is actually the tool you want before you file.

Not sure which one you need?

If you are staying in business and only changing tax status, revocation is a letter to the IRS. If you are closing the company, dissolution is the path, the state filing, the final return, and closing the IRS accountand there is nothing to revoke. When it is genuinely unclear which situation is yours, a specialist can talk it through before you file anything, and is on WhatsApp 24/7.

This page is general information about revoking an S-corp election, not legal or tax advice. The timing, short-year returns and five-year rule are worth confirming with a CPA before you file.