Seems these people ignored my suggestions. Calendar year end 2010, the LLC had and currently has 1 member yet another person is supposedly also an owner in 2010. Member wants to know if they can file a 2010 S-Corp return as 2 shareholders even though they did not file the S-Corp election. In 2009 the 1 member of the LLC filed a Schedule C return for the LLC.
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Off the top of my head
I have no idea which one but one of the remedies for late S Election probably applies. The question of whether you can fix the failure to list the new part owner with the SOS is a question to ask the SOS. Whether it can or can't be done will affect the S Election and if it can't be done retroactively then it will have to be done currently. I believe that the only notification the IRS would require of a post S Election shareholder change comes with the filing of the 1120S and its associated K and K1s.
Make sure you bill enough and if as I expect, you end up billing them more than you would have if they had followed directions, show them what their foolishness cost them. They may straighten up. This client has behaved foolishly but as far as I can see has not put you at increased exposure to charges that you did something wrong so I would not refuse the assignment unless I was for other reasons looking to cut my number of clients. When needed a PIA fee is a good thing because it either sends them away or it means you do the work for a fee that makes you feel adequately compensated for your trouble.Last edited by erchess; 08-14-2011, 06:29 PM. -
Besides issues with SOS I see a problem that the company did not present itself as corporation in 2010 but now wants to be treated as such.
It one thing to be a corporation and seeking S-Corp. status but another to never really have been a corporation.
Sorry, I have no answer.Comment
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