Dillema-Sole Propr. to S Corp back to Sole Pro.

[Bird Legs]

Client was self employed with one employee. in 2004, at the recommendation of someone
else, she formed an S Corp. Dormant through 2005, filing on Sched. C. Client decides to activate the corporation as of 1/1/06. She started paying herself a salary. P/R reports were prepared and filed and W-2s issued. Problem is she never acted as a corp. in that
no stock was issued, no corp. minutes, no stockholder meetings.
Now she wants to unincorporate. There have been no 1120S' prepared or filed.
Can client file her 2006 and 2007 income tax return as if she were self employed, reporting the W-2 wages and Federal withholding?
Deducting her wages on the Sched. C. She did have one employee, other than herself, for both of those years.

[Nashville]

Secretary of State

Bird Legs - good to hear from you and happy to see you back posting.

This is an old friend at a new computer with a new username.

From what you are telling us, she might have never registered with the secretary of state. If this be the case, the corporation never existed, and she can go back to filing as an individual

If the corporation exists, then, as a taxpayer she is stuck, and as a preparer, you are also stuck. Some kind of corporate return will have to be filed.

Just my opinion, Stevie.

[fliszt]

Birdlegs, what are

you doing working?? Glad to see you though.
I don't know the answer to your question, but thoughts are, if she filed a w-2 etc, and had 1 employee, then perhaps she should file as an Scorp. Corporate minutes, etc I would think could be updated if need be. But those are not needed to file taxes. So you can explain to her the procedures of being an S corp. Then perhaps file a return for 2005 with no income & no expenses. Then do the 2006 as an S and mark it as final return. Then next year she could file a sched C.
I'm probably all wet, but those are just my initial thoughts.
Get well my friend.
Prayers are still with you.
Larry

[dsi]

In CA one must also officially disolve the corp through the Sec of State.

[Bird Legs]

Thanks

for your responses and concerns. Nashville, good to hear from you. Keep it up.
Larry, if I was not working I would sit here and go crazy. Of course, the wife says I am that way already.
Appreciate all of you for your help with my questions and all your concerns.
Stevie

[Black Bart]

Our friend

for your responses and concerns. Nashville, good to hear from you. Keep it up.
Larry, if I was not working I would sit here and go crazy. Of course, the wife says I am that way already.
Appreciate all of you for your help with my questions and all your concerns.
Stevie

Was just rereading some threads and came across this typical Bird's post. It makes you sad to think he's gone. Such a wonderful guy -- helpful, humble, self-effacing, always appreciative of assistance while offering his own with an up-beat attitude.

It speaks well for a man to face what he did in the manner he did.

[DTS]

Birdlegs

Bart,

It certainly does! On the bright side, being able to read past posts does help the absence a little bit. Makes it seems like he's still here and that is nice.

Dennis

[Black Bart]

Yes it does and is.

Bart,

It certainly does! On the bright side, being able to read past posts does help the absence a little bit. Makes it seems like he's still here and that is nice.

Dennis

Thanks for your nice comments, Dennis.