S Corp election Status date

[Steve M]

My client had a C corp and filed for an S corp election the second quarter of 2007. (He has an extension for 2007 so I have not filed for him yet) In July of 2008 he received a notice from IRS granting him S Corp status effective Jan. 9, 2007.

My question is do I file his return for 2007 as a C corp (what it was at the beginning of the year) or as an S corp which it was after Jan 9th or do I have to file both a C corp for 9 days and then an S Corp.

Keep calling the IRS business line and continuously get disconnected so hope one of you knows the answer.

Thanks,

Steve M

[rfassett]

My client had a C corp and filed for an S corp election the second quarter of 2007. (He has an extension for 2007 so I have not filed for him yet) In July of 2008 he received a notice from IRS granting him S Corp status effective Jan. 9, 2007.

My question is do I file his return for 2007 as a C corp (what it was at the beginning of the year) or as an S corp which it was after Jan 9th or do I have to file both a C corp for 9 days and then an S Corp.

Keep calling the IRS business line and continuously get disconnected so hope one of you knows the answer.

Thanks,

Steve M

Two short year returns. But I'm finding it difficult to believe that he received a notice in July of 2008 granting an effective date a year and a half earlier. Are you certain of the dates?

[jainen]

>>effective Jan. 9, 2007<<

Either you are misreading the notice or something else is going on that you haven't told us. The S-election is effective for the entire year. (That is, unless it was inadvertently TERMINATED on a specific date creating two short years.) Apparently it took the IRS a good while to accept the reasonable cause for the late election