What are the qualifications to file as an S-Corp? Why would the IRS deny my designation?

Hi Janet! 

As per the IRS, in order to qualify for S corporation status, the corporation must meet the following requirements:

• Be a domestic corporation
• Have only allowable shareholders
• May be individuals, certain trusts, and estates and
• May not be partnerships, corporations or non-resident alien shareholders
• Have no more than 100 shareholders
• Have only one class of stock
• Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations)
• In order to become an S corporation, the corporation must submit Form 2553, Election by a Small Business Corporation signed by all the shareholders. See the Instructions for Form 2553 PDF for all required information and to determine where to file the form.

There’s a lot more info on here. 

Sorry, I don’t think I have a response for why they would deny, there’s nothing specifically about that on the IRS website. It only states they may approve or denny. As long as you meet their requirements, I don’t see why they would deny.