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Walking away from an S-corp

February 06, 2017 • Larry Gurewitz • Log In to Post Comments

 

My client is a struggling musician.  He has an S-corp with a balance due from both the Calif and the IRS.  He set-up an installment plan with IRS paying the minimum amount over 72 months.  We are trying to abate some of the penalties by filing for reasonable cause.   He and his wife and child moved to Nashville to be closer to the music scene and lower his living costs.  We will request an OIC in the next couple of months.

For California purposes I want to see if we can walk away from the 1120S.  He has no bank account under the corporate name.  All deposits go thru a paypal account under is name and then transfered to his personal bank account.  His assets are his music equipment which were not listed on his 1120S.  I believe we should file his 2016 return as a final return and then file an OIC.  

He is working in Nashville now.  He wants to set-up an LLC and possibly file as an S-corp in Tennesse.

Am I on the right track or am I missing something?

Larry

 

 


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