1120S Election

[ILLMAS]

TP has not filed his 2007 return, first year of activity, it turns out that we wants a to file as a 1120S and not 1120, we are in 2009, do you know if one can can still file an 1120S and make the election or should the 2007 be filed as 1120 and make the election in 2008 or 2009?

[TAXBILLY]

This may help:

http://www.legalbitstream.com/scripts/isyswebext.dll?op=get&uri=/isysquery/irl18b9/1/doc

taxbilly

[jainen]

>>we wants a to file as a 1120S<<

IRS is tolerant of late elections if it's just a paperwork problem and the corporation and shareholders treated it like an S-corp all along. The absolutely most important question is whether you are making a retroactive decision in light of more recent facts. If for example you expected several years of corporate losses but once the books were closed it turned out to be a big gain so now you want to avoid double taxation, that won't work. It's nice to demonstrate that the original plan was based on S status and the company has been operating accordingly. By demonstrate, of course I mean document.

[OldJack]

It may not be the case for this client, but when a taxpayer asks me after not file their taxes on time for several years I take the position that it is too late. You should make sure you are not making a false statement just to save the taxpayer on their tax.