Tax Guru – Ker$tetter Letter

Q-1:

Subject: Question

 

Earlier this year I decided to revoke my subchapter S and am now wondering if that was an appropriate decision.  Is it possible to request re-instatement before I file this year’s taxes?  To whom do I petition?  Does the IRS have a small business advocate?  I am a micro-business (myself and a PT assistant).  My business is financial brokerage – revenue is from commissions.  Thanks for any input you can provide.

A-1:

Before you continue flipping back and forth between C and S, you need to engage the services of a tax professional who can give you guidance as to what is best for your unique circumstances.  Making a decision such as this on your own is no different than taking potentially toxic medicine based on what your friends may have told you or you saw in a TV ad.

If you and your professional advisor do decide that remaining as an S is the best for you, s/he should be able to help you rescind the erroneous revocation via the special hotline IRS has for us practitioners.

Good luck.

Kerry Kerstetter

Q-2:

I paid $750 to a CPA (formerly with Deloitte an Touche) to request a rescision of the revocation request.  He sent it to the wrong IRS dept and  made one phone call that  did not resolve anything.  Please forward the hotline number you refer to and I will ask my accountant to call on my behalf.  Appreciate your time!

A-2:

IRS has a web page with the special contact info for tax pros.

You still need to properly analyze which structure is best for you.

Good luck.

Kerry Kerstetter

Follow-Up:

Thanks much!!