The Tennessee Election of 'S' Corporation Status and Instructions — IRS 2553 is a crucial process for businesses operating in Tennessee that want to elect 'S' Corporation status for tax purposes. This election allows eligible entities to be treated as S corporations by the Internal Revenue Service (IRS), offering potential tax benefits and advantages. Key terms and keywords associated with the Tennessee Election of 'S' Corporation Status and Instructions — IRS 2553 include: 1. Tennessee Election: Refers to the specific process within Tennessee state law to elect 'S' Corporation status for tax purposes. 2. 'S' Corporation Status: Describes the tax classification available to certain eligible small business entities that elect to be treated as S corporations. This status allows for pass-through taxation, wherein business profits and losses are reported on the individual shareholders' tax returns. 3. IRS Form 2553: Also known as the Election by a Small Business Corporation, this is the official form required by the IRS to elect 'S' Corporation status. It requires specific information about the business, its shareholders, and the requested effective date for the election. 4. Tax Benefits and Advantages: The election of 'S' Corporation status can provide various tax benefits, including avoiding double taxation (as experienced by C corporations) and potential tax savings for shareholders. Types of Tennessee Election of 'S' Corporation Status and Instructions — IRS 2553: 1. Initial Election: Refers to the first-time election of 'S' Corporation status for a business entity in Tennessee that qualifies and meets the IRS requirements. 2. Late Election: Occurs when a business fails to file IRS Form 2553 by the required due date but still wishes to elect 'S' Corporation status. The business must provide reasonable cause for the delay to the IRS. 3. Termination of 'S' Corporation Status: Describes the process of voluntarily or involuntarily terminating 'S' Corporation status for a business entity in Tennessee. This could occur due to not meeting eligibility requirements or by choice, and the business will then be reclassified under different tax rules. To ensure a successful Tennessee Election of 'S' Corporation Status and accurate completion of IRS Form 2553, it is highly recommended consulting a tax professional or attorney familiar with Tennessee state laws and IRS regulations applicable to 'S' Corporation elections.