I spoke with an attorney about this very matter. He stated it was not a good idea for two reasons, 1 being legal liability that the sole prop ein was attached to your schedule c and ssn, two the IRS would not recognize the termination of the schedule c. In other words they would always be looking for a schedule c on my 1040. Being a tax accountant, he suggested I get a new ein and efin in order to decouple my schedule c business from my new s corp business.
It didn't state in the original thread if the client was starting a new s corp and getting a new ein or just filing as an s as opposed to a schedule c. I assumed the latter.
Schedule C to S Corp
in General Chat
Posted
I spoke with an attorney about this very matter. He stated it was not a good idea for two reasons, 1 being legal liability that the sole prop ein was attached to your schedule c and ssn, two the IRS would not recognize the termination of the schedule c. In other words they would always be looking for a schedule c on my 1040. Being a tax accountant, he suggested I get a new ein and efin in order to decouple my schedule c business from my new s corp business.
It didn't state in the original thread if the client was starting a new s corp and getting a new ein or just filing as an s as opposed to a schedule c. I assumed the latter.