Corp to scorp

[TAX]

Client, originally corp until 2008 converted to scorp in 2009. But realized that he made a mistake so he wants to convert back to corp for 2009.

(1) Is there a process to follow - I think just a letter

(2) What are the chances of approval?

Thanks!

[JohnH]

Chances of approval are 100%, because he doesn't ask for permission - he just tells IRS what he's doing. But if he decides to convert back, he can't do that for for 5 years.

[ChEAr$]

Client, originally corp until 2008 converted to scorp in 2009. But realized that he made a mistake so he wants to convert back to corp for 2009.

(1) Is there a process to follow - I think just a letter

(2) What are the chances of approval?

Thanks!

Getting out of the S corp is just like getting in, by making an election within the 75 days
from beginning of fiscal year. Thus for a calendar year S corporation who right now decides he wants to go back to a regular corporation, with consent of 51% of stockholders, the
election is made and is effective NEXT year, i.e. 2011. IOW one just can't willy nilly go back and forth at leisure.

However... there is a way and that is to do something that automatically voices the S corporation parameters. The easiest thing I can think of is to issue a second class of stock and thus run afoul of S corporation requirements. When this happens, the old S corporation tax year terminates, and the new C corporation year begins, i..e two partial years.