These are all from an email exchange with the same person this past August.

Q-1:

Subject: re: scorp

hi,

do you know if i can retroactively go from a c -corp to an s-corp more that on year for example a c corp was formed in 2002 can i go back to an s- corp from 2003??

 

Thanks

A-1:

Your question is a bit confusing; so I'll tackle a couple of possibilities.

You can't switch back and forth between C and S corp status from year to year.  After revoking an S election, you may not reinstate it for at least five years.

If you are now, in 2005, wanting to file for an S election for 2003, it will be extremely difficult unless you have a very good reason to convince IRS to honor such a very late request on Form 2553.

As always, you should be working with a tax pro who understands both C and S corps, and not trying this kind of thing on your own.

Good luck.

Kerry Kerstetter

Q-2:

Subject: Re: s corp

 

hi,

My question is, can money have been legally collected (prior existing agreement) as an agent for the corp. he is collecting as a private collection agent for the corporation. The money was deposited into the collection agents personal account.This money was used to pay corporate bills-as per the agreement between the corporation and said collection agent.If above is true , than corporation will be claiming said income and expenses on corporate return.

Note-The collection agent is the only shareholder of said corporation.alls money paid had a 1099 issued to the collection agent personally. my question is there any legal way for the corporation to end up with income and expenses??

 

Thanks alot.

A-2:

I have some info on how to handle this kind of thing on my website.

You and your personal professional tax advisor should work out the best approach for your circumstances.

Kerry Kerstetter

Q-3:

Thanks for the quick response, do you know if it is legal to take in money this way? (were he is collecting money for the company  he is working as a collection agent for the company and the collection checks are made out to him personally? thanks for explaining how to disburse it but can he take the money in this way ? again thanks for your help...

A-3:

From a legality perspective, there are several areas that need to be considered. 

As  a CPA, I can only address the issue of income taxes.  If all monies received and paid our are properly reported to the IRS and State tax agency, that should be okay.

From the regulatory  side, in regard to Federal and State laws over collection agencies, you will need to check with the applicable agencies or consult with an attorney who works in this area.

In regard to yourself and the company for which you are making collections, as long as they receive what they are entitled to under your services agreement, and they don't have any problem with the money coming through your account, there shouldn't be any problem there.

Kerry Kerstetter

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/26/2005 12:58:00 PM Send this post: