I have a client that went from and LLC to S Corp. Never used S Corp and want to return to LLC, taxed as sole prop. How, if I can, do I take them back to an LLC. Thanks

[hbrossandco]

My client wanted to go from and LLC to S Corp.  We completed the necessary paperwork and was granted S Corp status.  A year later my client, who we have not filed taxes for this year yet, wants to go back to an LLC. Yes, they want to be taxed as a sole prop again.  I have no idea how to go about doing that. Is there a way?  I did file an extension for the S Corp prior to hearing from them about the change.  Any help would be most appreciated. 

[TaxMonkey · Accepted solution]

You file as statement to revoke S-corp status (which makes you a C corp) then file Form 8832 to change from C to disregarded entity.

I don't think there is any late relief for these elections, which kind of sucks because the due date for Jan 1 2019 was March 15, 2019

https://www.irs.gov/forms-pubs/revoking-a-subchapter-s-election

https://info.legalzoom.com/terminate-scorp-election-revert-llc-23367.html

[hbrossandco]

Thank you for your help, I really appreciate it.