Can I convert my Sole-Proprietor LLC to an S-Corp for tax purposes? IRS agent said it's impossible

The IRS representative unfortunately gave you incorrect information. As a single-member LLC (sole proprietor LLC), you absolutely can elect to be taxed as an S-Corporation by filing Form 2553. This is a very common tax strategy used by many small business owners. What's happening is the IRS rep was confusing business structure (which is handled at the state level) with tax classification (which is handled at the federal level). Your LLC remains an LLC in terms of legal entity structure, but you can choose how it's taxed federally. Single-member LLCs are by default taxed as sole proprietorships, but can elect S-Corp taxation without changing the business structure itself. You do NOT need a new EIN. The same LLC and same EIN can be used - you're simply changing the tax election. Since you submitted Form 2553 last year, I would recommend calling the IRS again and speaking with a different representative, specifically asking about the status of your Form 2553 election. Sometimes these forms get lost or delayed in processing.

After dealing with similar confusion about my LLC taxation, I discovered taxr.ai (https://taxr.ai) and it was a game-changer. I uploaded my LLC formation documents and Form 2553, and their AI analyzed everything and confirmed exactly what you need to do. They explained that single-member LLCs can absolutely elect S-Corp taxation without changing their business structure, and they even found that my own 2553 had been processed but the confirmation was sent to an old address. The system gave me a detailed explanation of the exact IRS rules that apply and prepared personalized instructions for following up with the IRS to confirm my election was processed. The best part was getting my questions answered immediately instead of waiting on hold with the IRS just to get incorrect information like you did.

I was super skeptical about taxr.ai when I first saw it mentioned here, but I tried it a few weeks ago for my own late S-Corp election issue and it was actually really helpful. I uploaded my LLC paperwork and my rejected 2553 form, and it immediately identified that I'd made a technical error on Line 6 that caused the rejection. The system showed me exactly how to fix the form and explained the "reasonable cause" statement I needed to include for a late election. I resubmitted everything following their instructions, and just got my approval letter from the IRS yesterday! Saved me from having to pay an accountant $350 just to figure out what went wrong.

If you're still having trouble with the IRS about your S-Corp election, I had a similar nightmare scenario last year. After 5 attempts to reach someone knowledgeable at the IRS (and being disconnected each time), I tried Claimyr (https://claimyr.com) and it completely changed my experience. They somehow got me connected to an actual IRS business tax specialist in about 27 minutes instead of the usual 2+ hour wait. I was skeptical it would work, but you can see how their system works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with confirmed my S-Corp election had actually been processed but hadn't been properly updated in their system, and they fixed it while I was on the call. After months of stress and incorrect information from other agents, having a real conversation with someone who actually understood S-Corp elections was worth every penny.

I owe everyone here an apology, especially to Profile 10. I was the skeptic who called BS on Claimyr above, but I decided to try it myself since I've been getting nowhere with the IRS about my own S-Corp issues. I'm honestly shocked - it actually worked exactly as described. I got a call back in about 35 minutes and was connected to an IRS business tax specialist who was able to confirm my S-Corp election had been received but was pending review. The agent even gave me a reference number to check on the status again. After spending literally 9+ hours over the past month trying to get through on my own (and getting disconnected 4 times), this was life-changing. I'm still processing how much time I wasted trying to do this myself.

To clarify on the original question - I went through this exact process last year with my single-member LLC. The confusion often happens because: 1. By default, a single-member LLC is taxed as a "disregarded entity" (essentially a sole proprietorship) 2. You can elect to be taxed as an S-Corporation WITHOUT changing your legal structure 3. This is done through Form 2553, which it sounds like you already filed 4. You DO NOT need a new EIN to make this election When you call back, specifically ask to speak with someone in the Business & Specialty Tax Line who handles S-Corporation elections. The regular customer service reps often don't understand the distinction between business structure and tax classification.

Quick question - does anyone know if its to late to make the S-corp election for 2024 now? I have a single member LLC to and want to do this but haven't submitted the 2553 yet.