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It sounds more like a hobby than a business. Why would you want to draw attention to it by filing an S-election now, hoping to make it retroactive? Why does the company want to be an S-corporation? It's going to cost them a bundle to have you do their past bookkeeping, payroll, financial statements, personal returns, etc. I hope you have a huge retainer. Can they afford you? Can they afford all the P&I? If they came to me and insisted on a much-too-late S-election, I'd send them elsewhere! If they came to me to make a fresh start, I'd work with them to treat their casual hobby/business like a real business. I would not rewrite their history. Depending on their income and long-term plans (do they want to take in a new shareholder, for instance?) I might suggest an S-election for 2023, after I've seen them make the changes I'd require. If you have time to redo 2022, you might make a late election for 2022.

I agree with Lion. You have no idea if this taxpayer would benefit from becoming an S-Corp. Most likely not if business and personal account is intermingled.

The IRS says it will be caught up with all 2020 and earlier personal tax returns soon, with 2020 business tax returns shortly thereafter: https://www.irs.gov/newsroom/irs-continues-work-on-inventory-of-tax-returns-original-tax-returns-filed-in-2021-to-be-completed-this-week Also: 2.1 Million unprocessed Form 1040-X 3.7 Million unprocessed Form 941 215,000 unprocessed Form 941 X

Our tax dollars at play?

Way to go girl....Marie solved the 8890 problem....

I believe the original post, which is kind of unclear, says the person who passed away sold the basket to the to the current owners in 2010 for $ 1,500, which happens to be the only indication of what the basket is worth.

Our tax dollars at work -- NOT.

Same here.