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Government may challenge an S corporation election on the basis
of defects that are apparent on the face of the Form 2553, but
only the Government may challenge an election on the basis of
defects that are not facially apparent. Respondent's theory
represents an effort to distinguish our opinion in Smith v.
Commissioner, T.C. Memo. 1988-18, where we accepted a taxpayer's
challenge to an S corporation election, although it was based on
a facially apparent defect (absence of any signature of an
officer authorized to elect for the corporation). Also, in Levy
v. Commissioner, 46 T.C. 531 (1966), we found an S corporation
election invalid on the basis of a defect that was not facially
apparent (Form 2553 signed by corporate officer where actual
authority to sign resided with bankruptcy trustee), albeit at the
behest of the Government. However, we find nothing in Smith,
Levy, or any of the other cases cited by respondent to suggest
that the identity of the challenger, or the status of the Form
2553 defect as facially apparent or not apparent, was important
to the result. We accordingly reject respondent's contention and
permit petitioner's challenge of the S corporation election in
this case, whether or not based on facially apparent defects in
the Form 2553.4
4 It is worth noting, however, that in Smith v.
Commissioner, T.C. Memo. 1988-18, where a taxpayer's challenge of
an S corporation election was sustained, the question of whether
the taxpayer should nonetheless be estopped from denying the S
(continued...)
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