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Yes — you can revoke your S-Corporation (S-Corp) election. However, the IRS has specific rules and procedures you must follow. Revoking your election changes how your business is taxed, so it’s important to understand both the process and the implications before making the switch.

How to Revoke Your S-Corp Election

1. Prepare a Revocation Statement:

The revocation must be made in writing and should include:

• The corporation’s legal name and Employer Identification Number (EIN)

• The effective date of the revocation (or state that it applies to the current tax year)

• A statement clearly declaring that the corporation is revoking its S-Corp status

2. Get Shareholder Approval:

• The statement must be signed by shareholders who collectively own more than 50% of the company’s stock (both voting and non-voting shares).

• Without majority approval, the revocation cannot proceed.

3. File With the IRS:

• Mail the revocation statement to the same IRS Service Center where you filed your most recent tax return.

• The IRS will review and confirm the change.

Effective Date of Revocation

• By default, the revocation is effective at the start of the current tax year, provided the request is made by the 15th day of the third month (typically March 15).

• If filed later, the revocation usually takes effect at the beginning of the following tax year, unless you request and receive IRS approval for a mid-year change.

What Happens After Revocation?

Once S-Corp status is revoked, your company will generally be taxed as a C-Corporation, unless you elect another tax classification. This means:

• The business pays corporate income tax at the entity level.

• Shareholders may face double taxation (corporate tax + personal tax on dividends).

Why You Should Consult a Tax Professional

Revoking S-Corp status is a major decision with long-term implications, including:

• Changes to tax liability and shareholder distributions.

• Possible state-level tax consequences.

• Limitations on re-electing S-Corp status in the future.

Because of these complexities, it’s highly recommended to seek advice from a CPA, Enrolled Agent, or tax attorney before proceeding.

Conclusion

Yes, you can revoke your S-Corp election by filing a written revocation statement with the IRS, signed by shareholders holding at least 50% of the company’s stock. The revocation usually takes effect at the start of the current or next tax year, depending on when you file. Before moving forward, carefully consider the tax consequences and consult with a professional to ensure it’s the right decision for your business.