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    #1

    S Corp Status

    Taxpayer opened up a Corporation in Feb 2009. He did not filed his 2009 return and he cannot find his tax preparer. I am almost sure that he did not file for a S Corp status. neither has an extension has been filed.
    The Corp went down at the end of January but that is a whole different story for 2010.
    Is it too late to file the S Corp return and including the 2553. I am almost sure he has to pay a penalty.
    Any advice?
    thanks
    brian
    Everybody should pay his income tax with a smile. I tried it, but they wanted cash
    Tags: None
    #2
    You can do the late S election by filing with this on the return

    "FILED PURSUANT TO REV. PROC. 2003-43"

    and attach a statement indicating that the corporation either had reasonable cause (and spell out the circumstances) or inadvertently failed to file Form 2553 in a timely manner. Both Form 2553 and the attached statement must be signed by each and every single shareholder. (More information: IRS Revenue Procedure 2003-43.)

    You should be able to get the penalty for late filing abated as well.
    In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
    Alexis de Tocqueville

    Comment

      #3
      Why not consider ignoring the S-corp election altogether for 2009 & 2010 and just file as a C-corp for those two years? Chances are that possible penalty exposures will be less (or maybe nonexistent). Then decide in early 2011 if an s-corp election is wise at that time.
      "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

      Comment

        #4
        Originally posted by JohnH View Post
        Why not consider ignoring the S-corp election altogether for 2009 & 2010 and just file as a C-corp for those two years? Chances are that possible penalty exposures will be less (or maybe nonexistent). Then decide in early 2011 if an s-corp election is wise at that time.
        The Corporation is closed effective January 31 2010.If I prepare the C corp return he will not be able to claim the losses.
        brian
        Everybody should pay his income tax with a smile. I tried it, but they wanted cash

        Comment

          #5
          No short-term capital loss available? Unless the numbers are very high, even spreading a loss out over a few years might be less messy and might even reflect reality. (Just foof for thought - not a recommendation.)
          Last edited by JohnH; 08-12-2010, 02:58 PM.
          "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

          Comment

            #6
            Originally posted by JohnH View Post
            No short-term capital loss available? Unless the numbers are very high, even spreading a loss out over a few years might be less messy and might even reflect reality. (Just foof for thought - not a recommendation.)
            Concur with my North Carolina learned colleague. Even with it being a regular,
            C, corporation, the losses will still be usable in capital loss format. Need to look at
            the big picture, indivdiual estimated 1040's for affected years to include 2010.

            Another thought. If a valid corporation extension was not timely filed, that might push the kabosh (?)
            on any "after the thought" election.
            Last edited by ChEAr$; 08-12-2010, 03:49 PM.
            ChEAr$,
            Harlan Lunsford, EA n LA

            Comment

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