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Posted by TomT on January 10, 2008, 11:03 am
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I am a business counselor with the Small Business Development Centers
(SBDC) and have a client that I think was given ba advice from their
accountant and wanted to ask others opinions. I am somewhat familar
with tax laws, but since I don't deal with it every day there is no
way for me to keep up with all the rules.
He has been a sole proprietor for several years and in 2006 decided to
setup an LLC for the liability protection. Rather than be tax as a
sole proprietor his accountant suggested that he be taxed as S-
corporation. First I don't know why, it is a landscaping business
with only a few employees and not generating large revenue. Second,
the accountant filed a IRS form 8832, but didnot file a 2553.
1) First do you see any reason why it would make sense to sqitch to a
S-coporation?
2) If he does want to switch to be taxed as a S-Corporation, would you
have to file a 8832 and a 2553, or neither, both, etc.
3) The accountant kept the same EIN as before, would they need to get
a new EIN if they did decided to be taxed as a S-corporation.
Thanks for any assistance.
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