the entire loss and provided the following explanation for the
disallowance:
Since we have no record of a valid Small Business
Election filed on Form 2553 to elect sub-chapter S, the
loss claimed on your Form 1040 has been disallowed for
1993.
Respondent further determined that petitioner was liable for the
addition to tax under section 6651(a)(1) because his 1993 return
was filed late, and that petitioner was liable for the negligence
penalty under section 6662(a).
OPINION
Management's S Election
The dispute between the parties focuses upon whether
Management made a timely election to be treated as an S
corporation. See sec. 1362. If so, then petitioner properly
claimed a loss attributable to Management on his 1993 Federal
income tax return. See sec. 1366. If not, then respondent
properly disallowed the loss so claimed.
An election to be treated as an S corporation must "be made
in such manner as the Secretary shall by regulations prescribe."
Sec. 1377(c). Pursuant to section 1.1362-6(a)(2), Income Tax
Regs., a corporation elects under section 1362(a) to be treated
as an S corporation by filing a Form 2553. Generally, a document
is considered filed with the Internal Revenue Service when it is
received by that agency. United States v. Lombardo, 241 U.S. 73,
76 (1916).
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