Does anyone know if using a tax professional to file the late Form 2553 increases the chances of acceptance? I'm in this exact situation, and I'm wondering if it's worth paying someone to handle it or if doing it myself is just as effective as long as I'm honest about the reason for lateness.

I went through this exact same situation last year and want to share what worked for me. I missed the 75-day deadline by about 3 months and was terrified the IRS would reject my application. For the reasonable cause statement, I kept it simple and honest: "As a first-time business owner, I was unaware of the 75-day election deadline requirement for Form 2553. Upon learning of this requirement through research and consultation, I am filing this election promptly." That's basically it - no elaborate excuses or sob stories. The key things that helped my case: 1. I attached the reasonable cause statement as a separate page (don't try to squeeze it into margins) 2. I made sure ALL shareholders signed - even if it's just you 3. I sent it certified mail with return receipt 4. I clearly indicated my desired effective date Got approved in about 7 weeks. The IRS really is more understanding than people think, especially for genuine first-time business owner mistakes. Just be honest about not knowing the deadline and file as soon as you can. Good luck!

One thing nobody mentioned - Form 8332. If parents can agree, the custodial parent can sign this form to release their claim to the exemption, even if the child lived with them more. This might be a good solution if they can work out an agreement (like each parent claims one child). Also, if they're truly 50/50 and neither parent can prove they had more nights, the IRS tiebreaker goes to higher AGI anyway, which sounds like it would be your brother.

Your brother should also consider setting up a shared photo album (like Google Photos or iCloud) where both parents can add timestamped photos of the kids during their respective custody time. This creates an automatic digital trail that's hard to falsify. I'd also recommend he starts taking screenshots of his phone's location history if he has it enabled - it can show patterns of where he was (home vs. ex's house) during custody exchanges. Most smartphones track this automatically. One more tip: if the twins go to any regular activities (library story time, playground visits, etc.), he should try to get receipts or sign-in sheets when possible. Even small documentation like this helps build the overall picture of active custody. The key is starting this documentation NOW, not waiting until tax season. The IRS wants to see consistent patterns over time, not just a few weeks of suddenly detailed record-keeping.

Had this same issue! If you previously had an IP PIN but can't get a new one in time, you have a few options: 1. File an extension using Form 4868 - this gives you until October to file (but you still need to pay any taxes owed by the original deadline) 2. File by paper - slower processing but allows you to include an explanation about the IP PIN situation 3. Contact the Taxpayer Advocate Service if you're facing financial hardship due to refund delays Just don't skip the PIN if your account is flagged as needing one - guaranteed rejection!

Just posting to save someone else the headache I went through... If you enroll in the IP PIN program, you're in it FOR LIFE. They don't make this super clear! Once you get a PIN, you'll need one EVERY year going forward. Ask me how I know 😭

Just wanted to add another option that might help - if you're really cutting it close to the deadline, many post offices extend their hours on tax day (April 15th) specifically for tax returns. Some even stay open until midnight! Call your local post office to confirm their extended hours. Also, if you're in a major city, look for the main post office or processing center - they often have drive-through service where you can drop off your certified mail without even getting out of your car. This can save you tons of time compared to waiting in line inside. One more thing - if you do end up mailing close to the deadline, take a photo of your envelope with the postmark clearly visible when you drop it off. It's extra documentation that you filed on time, just in case there are any questions later. Good luck with your first filing! It gets easier each year once you know the process.

Another thing to consider as a first-time filer - if you're really nervous about the mailing process, you might want to look into filing an extension (Form 4868) to give yourself more time. You can actually e-file the extension for free even if you plan to mail your actual return later. This buys you until October 15th to file, though you still need to pay any taxes owed by the original deadline. That said, if you have everything ready to go, definitely just mail it now! The advice about USPS with tracking is spot-on. I always use Priority Mail Express for tax returns because it includes tracking, insurance, and guaranteed delivery date - gives me complete peace of mind for something as important as taxes. Yeah, it costs more, but considering how stressful tax season can be, the extra $25-30 is worth it to me. Also, don't forget to sign your return! It's one of the most common mistakes that delays processing. The IRS will mail it back to you unsigned, which obviously defeats the purpose of getting it postmarked by the deadline.

Not to muddy the waters, but have you considered the possibility that this might be Section 1231 property? If so, neither Schedule D nor reporting it as ordinary income on the front of the return may be correct - Form 4797 might still be relevant but for different reasons.

Based on all the discussion here, I think you're on the right track with Schedule D treatment, but I'd strongly recommend getting this reviewed by someone with deep S-Corp expertise before filing. The short holding period (10 days) is really the biggest red flag that could invite IRS scrutiny. One thing I haven't seen mentioned - make sure you're also considering the impact on your client's QBI deduction. If this gain ends up being treated as ordinary business income rather than capital gains, it could affect their Section 199A calculation. The characterization of this transaction could have ripple effects beyond just the immediate tax on the gain. Also, given that this is a $135K gain, the stakes are high enough that it might be worth investing in a private letter ruling if your client is concerned about audit risk. It's expensive but would give you definitive guidance for this specific situation.