David Posted May 12, 2020 Report Share Posted May 12, 2020 SMLLC counseling business chose to be taxed as an S Corp for past years until 6/30/19. The client told me she was downsizing and moving into her home office and wanted to "close her S Corp", change to a SMLLC and file on Schedule C effective 7/1/19. I timely filed a final 1120S as of 6/30/19. The client dissolved her business name with the Secretary of State on 6/30/19 and then reinstated it on 7/1/19. She wants her business to be known by the same name she used for years. She tried to get an EIN using the same name but, of course, the IRS said she couldn't get an EIN for that business name. She doesn't want to use her SSN. I realize now that the best thing would have been to revoke her S election instead of filing a final 1120S. I can't see anywhere in my research materials that there is any relief for this situation and be able to retroactively revoke the S election. Has anyone dealt with this situation before and know if there is a way to retroactively revoke her S election or does anyone know what the best course of action is? If a retroactive revocation of S election isn't possible, then I am thinking that she can file a trade name under her true name (the name she has used and wants to continue to use) with the Secretary of State and then file for an EIN for the trade name. Is this possible or does the IRS issue an EIN for the true name only? The client also has a solo 401K plan - no employees. So I'm sure the plan will need to be split between the two EIN and business names. Any help would be appreciated. Thank you. Quote Link to comment Share on other sites More sharing options...
Lee B Posted May 12, 2020 Report Share Posted May 12, 2020 I don't see any justification for her to have an EIN. The same business name can be used as her dba . Or set up a SMLLC called "Jane Smith LLC" then set up her old business name as a dba of the SMLLC. 2 Quote Link to comment Share on other sites More sharing options...
David Posted May 12, 2020 Author Report Share Posted May 12, 2020 When you say the same business name can be used as her dba is this the same as your recommendation in your second sentence? Set up a new SMLLC with the Sec. of State and set up her old business name as a dba under the new SMLLC? Or am I not understanding you correctly? Thanks for your help. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted May 12, 2020 Report Share Posted May 12, 2020 Revoking her S election would make her taxed as a C corp. The dissolution was the correct process. Her mistake was creating a new entity with the same name. File a name change with the state then apply for a new EIN. And the bank may want her to open a new account for the new entity. https://www.thetaxadviser.com/issues/2008/apr/understandingthetaxconsequencesofliquidationtoansshareholder.html Quote Link to comment Share on other sites More sharing options...
Lee B Posted May 12, 2020 Report Share Posted May 12, 2020 1 hour ago, David said: When you say the same business name can be used as her dba is this the same as your recommendation in your second sentence? Set up a new SMLLC with the Sec. of State and set up her old business name as a dba under the new SMLLC? Or am I not understanding you correctly? Thanks for your help. Yes, exactly Quote Link to comment Share on other sites More sharing options...
David Posted May 12, 2020 Author Report Share Posted May 12, 2020 Thanks for helping with this mess. Quote Link to comment Share on other sites More sharing options...
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