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II think a very important issue is finding out what type of entity it is. If it's a corp, then it's important to know whether a Form 2553 was ever filed. That will have a HUGE impact on whether there are even any late-filing penalties due, because if the company lost money and it's a C-corp then there won't be any late filing penalties. Has anyone ever seen a home-grown corporation get the S-corp filing done correctly? I haven't. They will say they are an S-corp, but then you generally find out they filed articles of incorporation and never did anything else (oranizational meeting, by-laws, Form 2553, etc). Once they get the charter, they just assume they are an S-cop because they have a small number of shareholders. (I'd think "shareholder" implies a corporation, whereas "member" implies a Limited Liability Company. I'm not familiar with the term "Limited Liability Corporation". ) As jainen said, your first step should be to contact your Sec of State and find out what's in the public record (if anything). In many states, all you have to do is look up the info on the Sec of State's web site - no phone call required. Maybe you'll learn that nothing was ever filed, no entity really exists, and your client can demostrate that some sort of fraud was perpetrated on her.

>>An elderly client... " Call your county district attorney elder abuse office. They will be interested in this story. Did you say "shareholder," as in limited liability corporation? Call the Secretary of State in your capitol, and find out what the history of this corporation is, including the names of the officers and whatever filings are public information (unfortunately, there may be a charge for copying). Turn it all over to the D.A. Then call the IRS practioner line and be completely honest. I doubt your client has a tax problem that can't be easily resolved. Her so-called friend, now--boo hoo indeed!