Start-up & Organization Costs

[RDALMASI]

I have a new Client (Co. XZY) which has incurred in Start-up & Organization Costs in 2009. The business did not make a single Sale during the year because Service has not been offered to the public in 2009. There is only Capital Paid-in and Start-up Costs for the business in 2009 in the company's bank statements. The company is formed as a C-Corp., and They will file as a 1120-S business, but the company was formed in July 2009 and Form 2553 (Election to be treated as a 1120-S ) was never filed. I need some help with three questions:

1) Under these circumstances, Does the Company have to file a return for 2009?

2) Since Form 2553 was not filed on time, How can we elect to file as a 1120-S
business in 2009 if necessary?

3) Since the business did not have any Construction Service performed in 2009,
Does this situation determine if the company have to file a return according to
the IRS Reg. in year 2009?

Any serious input with these questions will be highly appreciated....

[JG EA]

I'll answer # 1.
Instructions for Form 1120:

Unless exempt under section 501, all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. Domestic corporations must file Form 1120 unless they are required to file a special return. See Special Returns for Certain Organizations below.

[TAX]

2553 answered

2) Since Form 2553 was not filed on time, How can we elect to file as a 1120-S
business in 2009 if necessary?

Here is my answer for #2.

Look in to 2003-43 regulation.

Thanks!

[Davc]

It doesn't sound like they had started doing business in 2009 so you don't do anything with the start up and organizational costs. Which means it makes no difference whether you're a C or an S in 2009.