I have a new client, with a sticky situation:
It is a Scorp, registered with the state, has employees, files payroll reports, etc. However, it has never filed an 1120-S since its S-election well over 10 years ago. The sole shareholder has filed 1 personal 1040 in the last 5 years.
The client had no idea the preparer never actually filed the returns. Clearly, there is the proverbial, correct answer, any alternatives?
Perhaps dissolve the S-corp and record the income on a Schedule C on the 1040's that still need to be filed? Then, start fresh with a new S-corp?
Feedback would be appreciated.
