S Corp election 2553 valid?

[rfk]

A client has filed as an S corp as of 9/29/06. However, it was not conveyed that he was married at the time, which is obviously important in CA, because of community property laws. An EIN was established for the S corp, but all the 941's etc., at the request of the IRS should be paid through the old, sole prop EIN.

The key question, however, is whether the S corp election is valid because wife did not sign off on form 2553. What are the parameters in regards to this and should Rev Proc 2004-35 be valid here or some other notion? Should the automatic relief idea be implemented? Another idea might also be to just file S Corp tax return for the tax 2007 year, since it was so close to the end of the incorporation in 2006, and since old EIN was used for full year business as a sole prop. He still has yet to get a new bank account under new EIN and start paying taxes etc. Additionally, he was told by his bank to incorporate in order to get a loan for his business.

Thanks for your help. I apologize for the long winded, rambling on.

[veritas]

Have you looked

at the instructions for form 2553? It looks like both spouses must sign.

If the corporation filed a timely election, but one or
more shareholders did not file a timely consent, see
Regulations section 1.1362-6(b)(3)(iii). If the shareholder
was a community property spouse who was a
shareholder solely because of a state community property law, see Rev. Proc. 2004-35, 2004-23 I.R.B.