Changing Business Activity Code 1120S

[David]

S Corp single SH client now decides that he isn't a financial advisor but is an insurance agent. I have used the same business activity code and business description listed on his 1120S prior to picking him up as a client.

Is it as simple as changing the business activity code and description on his 2015 1120S or do I need to file some other form advising the IRS of the change?

If I simply change the business code and description on the 1120S, will that raise IRS eyebrows?

Thanks.

[BHoffman]

I'm pretty sure in all my years that I've done that a time or two without any problems afterward.

[GeneInAlabama]

I think the only thing that code does is show the IRS what deductions are normal for that type of business.  If the code accurately reflects the type of business there is less chance of audit.  I doubt that the IRS keeps track of the code year by year.

[Catherine]

And businesses do transmogrify over time.  I used to do far more bookkeeping than taxes -- now it's over 80% taxes.  And one lady I knew years ago started trying financial planning and turned out to have a strong affinity for selling annuities -- so she dropped everything else.  

[David]

Thanks, everyone.

[Lion EA]

He may need to amend his incorporation statement with the state if he was too specific to financial planning and didn't allow himself some wiggle room, such as ...and any other lawful business activities...

[Abby Normal]

I often change the code when I get a new client. I always get a laugh when the prior preparer answers the question "Product or service" with either 'product' or 'service'. I always look the return over a little bit more closely when I see that.

[Roberts]

Reminds me of the line on the return - what is your occupation? If any of my clients have the correct occupation I'd be rather surprised - except those listing "retired".

[michaelmars]

instructions say that if retired put down your last occupation before retirement.

[Catherine]

13 hours ago, michaelmars said:

instructions say that if retired put down your last occupation before retirement.

Ah, but some people (not tax accountants!) retire *years* before it becomes official!